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!

[Abby Weinstock]

I just looked at SDAT. The property at 4114 Eierman Ave. has registered ground rent. The title company just needs to contact the ground rent holder listed on the ground rent registry to redeem the ground rent. Not necessary to redeem through the SDAT process. You can see this yourself: https://sdat.dat.maryland.gov/... Select the county, select Address as the search method. Once the property pulls up, select "view ground rent registration" in the upper right-hand corner.