--The lender, usually but not always a Bank, (Something institutional:  Credit Union, Mortgage Co/servicer, CMBS,  CDC, Local Housing non-profit,  church group, etc.)  

They then transfer the loan to Fannie or Freddie where it is bundled up with a bunch of other loans with similar credit/debt to income/loan to value characteristics and sold to institutional investors as a bond (mortgage backed securities). 

Class B properties are typically owned by Institutional investors and private investment groups, or very high net worth individuals.

As a subject matter expert for a major lending institution and over 20 years in the industry properly executed "assignments" are not a problem. 

They target more for institutional money, but the concept is the same.

However I feel like another institution could probably use that rental income?

Thanks For an institutional lender, we're going to look at the total value of the properties as opposed to the dollar amount of what the value is vs what is owed.

It's greatest value is to the charitable institutions that market them to secure assets ahead of a benefactors demise (cynical snarl - mine).  

I shopped for which institution I would use years ago and found my credit union that doesn't charge me any fees, logs in a comment in which building and unit paid, mail me the receipts, and it works quite well.

Does anyone know of a financial institution that will do construction financing in this situation?