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I'm looking to buy a co-op apartment for residential use, and have found an solid option in a building that is currently set up for commercial use, but where there are already a handful of residential lofts (regulated by the Lofts Board). The entire building is in the midst of undergoing conversion now so that, once done, all owners will be able to seek Certificates of Occupancy that are residential if they desire.
I hope to buy and then get a residential C of O. (The unfortunate sequencing is driven by the seller.)
I understand that it is hard to get a mortgage on co-op buildings where with greater than 20% income comes from commercial leases (as it does in this case) or where the residential C of O is not yet in hand. The property typically also has to be at least 51% owner occupied on the residential side (which this is).
Any advice on my alternatives would be appreciated. Is it impossible to get a residential lease in a case like this, or just more time consuming or expensive to do so? I could bid on an all cash basis, to circumvent any initial financing issues driven by the temporary lack of residential C of O, but I do not want to keep this on my books as such permanently. (I want to lever up the investment and also gain the mortgage tax benefits.) Hence, I am trying to figure out how to get a mortgage now, or shortly after closing despite the high proportion of commercial lease income.
If you happen to have seen this before and have any suggestions re: mortgage brokers / financing approaches, your thoughts would be welcome.
Where is the building?
I think we would look at this as either a portfolio loan or a short term commercial loan until you can have it converted and refi into a residential mortgage.
Let me know if you would like to discuss.