Financing For Large Condo Conversion Project

[Sean Gribbons]

Hi BP Community,

Does anyone know how a large scale condo conversion project finds financing for the end buyer? Looking at the underwriting rules for FHA and CONV investors can only own a certain percentage of the total # of units in order to be eligible for this type of financing. Would they have to go with a non warrantable product or is there some sort of rule that allows it be a new condo building and waive some of the underwriting requirements?

I know that four units and under waives alot of the required condo docs but curious anything 5+.

Thanks! 

[Marshall Downs]

It ended up being fairly easy to find lenders willing to hop onboard. Our community is small and fairly tight knit so we had our realtor meet with the more active banks and credit unions in our market and all of them raised a hand to participate. 

The bank who financed the construction was really pushing the end loans, but at the end of the day they were far better suited to the commercial loan than structuring a loan for the buyers. I don't think they did any of the end loans because the other lenders in the market were faster and cheaper.