Lending options on Condominiumized Duplexes

[Jacson Bevens]

Good afternoon!

I've run into a unique situation (at least, unique to me and the three lenders I've spoken with about it) up here in Washington State with some investor clients who are trying to purchase four duplexes in a development. The structures are part of a complex that also has a 30-unit condo building, and are classified as "condominiumized duplexes" (a new term to me). 

While the listing advertises that they qualify for conventional financing, the underwriter has flagged the properties because they cannot find a Fannie or Freddie program that allows for what is essentially a multi-family condo. I found the lawyer that wrote the legal description and he explained that these are categorized as "airspace condos" but couldn't verify the lendability on them. Follow-up by the lender with Fannie and Freddie seems to confirm that there is not a loan program for buildings like these.

It sounds like FHA can work with them but obviously only for owner-occupied buyers, which my clients are not. ANYHOW... I'm curious if anyone here has run into this before, and may know of a loan program that would support these purchases. We're shopping portfolio rates now but as good of an investment as these appear to be, it's important to my clients that they be easy enough to sell in the future.

Grateful for whatever insight y'all can provide!