Condo Conversions

sign of the times? what condo conversion kept 50% as rent stabilized tenants?

845 Westend Ave

"I just learned an interesting fact from my bank. On a Condo, a bank will not give a mortgage on the unit if the condo bldg is not 70% sold and 51% owner occupied."

I've heard that too, but I don't know how to reconcile that w

with the various developments that have arrangements with banks to provide financing.

These are guidelines that do not have to apply to every borrower, if I am not mistaken. Banks can still lend at their own discretion.

It is not some much the initial purchaser who has an issue. The building usually has one bank that will give a mortgage to the initial purchaser, because that bank usually owns the mtg on the buidling so it is in their best interest to provide financing. It is when you go to re-sell it that that person buying from you will have a problem getting financing. Most of the big banks hold to their rules of 70% sold and 51% owner occupied. Could have a problem in the future re-selling in this type of building. Banks are very tight with money right now and I highly doubt they would take a risk like this

gcondo: Sure, but they rarely exercise that discretion. In my experience, if a building has more than 10% owned by one entity, most banks won't touch it. (Exception: I know at least one Wells Fargo banker who was willing to work hard to get an exception to the rule.)

And gcondo, the problem isn't the banks. It's Fannie Mae. Of course, you can get a non-Fannie mortgage, but you'll pay more.

FWIW, FHA is planning to revise their guidelines so that rent-regulated units are excluded from the calculation of % sold in condo conversions.