What do I do? Ground Rent Prevents 30 Year fixed.

[Nat Rojas]

Hey BP Community!

Looking for your tips and recommendations

Goal was to refinance a rental property in Baltimore City, MD this Friday. 2 Year lease in place.

30 year fixed at 80% LTV was ready to go.

Monday, I receive a call saying that the Ground Rent is unregistered through the city (takes 6-9 months if I were to start the process today) and because of that the Lender (per Fannie Mae and Freddie Mac guidelines) cannot approve a 30 Year fixed.

More specifically, the ground rent expires 2041. Per the guidelines, the leasehold must not expire any sooner than 5 years after your mortgage is set to pay off.

This means the lender will shorten the term on the subject property down to a 14-year loan instead of 30-year loan – this greatly reduces cash flow.

Today, New problem: with the new guidelines effective 1 April, 2021, the loan’s 4+ points no longer meets the Qualified Mortgage Guidelines. Meaning the 14 year loan may not work anymore.

Hard Money expires in one month.

Best case scenario: Redeem ground rent in a couple of weeks and I can move forward with 30 year fixed.

Considering a commercial loan. Thoughts?

Would greatly appreciate any opinions and thoughts to brainstorm past this speed bump.

Thanks in advance!

Looking for a lender to refinance into a 30 year fixed

80% LTV with 6 month seasoning.

Current mortgage is a hard money loan expiring 4/27/21

Appraisal completed 3/3/21 for $125,000

Address: 4114 Eierman Ave Baltimore MD

Issue: One option we received forced it into a 15 year mortgage due to Ground Rent Leasehold expires 2041.

Is this something you can assist with?

Thanks in advance!