Preferred lender for new development

In general the preferred lender can be a good choice to consider. The developer would have worked extensively with them to get them comfortable enough with the project. Obtaining financing to purchase new construction is always a challenge, but in this market it is especially so, considering how many lenders do not want exposure to projects with large unsold units(this is also a Fannie rule) Undoubtedly you've heard of the mortgage contingency clause in many purchase contracts. In new construction the sponsor often adds language to the contract that should you not be able to obtain financing you do lose the deposit but may cite an exception if you are turned down by the preferred lender. In short unless you are absolutely confident of your ability to finance you should consider the preferred lender, if only as a back-up.

So the building is 92% sold. There are no commercial units. So on the face of it, doesn't seem like the building would have trouble qualifying under Fannie Mae guidelines.

So why is it that every time i talk to one of the brokers representing the building, they keep pushing the preferred lender, even if we're not talking about financing? I can't help but think they're getting some kind of kick-back.

@mh330

Its likely because there is another issue with the building like a lack of reserves or something else, and that bank has the building approved, where others dont. Banks internal approvals are generally good for a year and sometimes issues are over looked by one bank that are caught by another.

Jim McPartland
Sales Manager/ PrimeLending
jmcpartland@primelending.com
212.257.7549