Banks hate the buildings I'm looking at

From the bank's perspective, if Fannie Mae doesn't have a current approval on the building, and you will put only 10% down, it is not a "very low-risk deal" despite your qualifications to pay over time. (Remember also, the low rates mean they have plenty of mortgage financing sales opportunities, so they can afford to be picky.)

The Fannie Mae approvals could probably be obtained where those are the only obstacle, no? (And if not, do you want to put your own money there?) You could get your real estate broker involved in that aspect; the sellers or sponsors will have the same difficulty with any buyer needing a mortgage, so they may be motivated to assist with fixing it.

Talk to another mortgage source, and maybe also look at new buildings where sponsors have pre-arranged financing?

Try looking at properties you can actually afford.

Thanks, very helpful (non-sarcastically for the first reply, very sarcastically for the second)...

Try using a bank that doesn't adhere to Fannie Mae rules. I had my loan denied by PNC earlier this year due to the sponsor owning more than 10% of the units. I switched to TD Bank and was able to obtain the loan. My loan officer was Joe Leffe. You may want to see what he can do for you.

10% down with little remaining cash on hand will not fly in this day and age--it wont be about the building

"10% down with little remaining cash on hand will not fly in this day and age"

It should have never flown in ANY age. This is what led us to the mortgage meltdown in the first place.

dha--I'm no fan of NYCMatt-he frequently comes off as a pompous as****e-but he's right on this score, his sarcasm notwithstanding. Your six figure income is irrelevant to any lender in these times if you want to borrow 90 percent. You do need a reality check. Many condos may still have only 10 percent minimum down payments, but obviously they don't speak for lenders. You may very well have to save until you have at least 20 percent, plain and simple.

If you can't put 20% down, you can't afford it.

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You ask a question , those are your answers ... what did you expect , softballs ???

where are you looking and for what

DHA,
It sounds like you can afford the monthly payment but don't have the down 20% down payment, and think you are a good credit. From the banks perspective there are two problems with that logic, first you might lose your job and second they might not be able to sell the loan if it doesn't meet Fannie rules.
You might be lucky as the bank might be protecting you against buying prematurely, but if not I think you might be in luck soon. It's looking like credit is loosening and you might face a very different lending market 12 months from now.
By the way, back in 2008 20% might not have worked either.

People were putting 10% down and less for years before the crisis.

Banks hate condo resales. I had one bank that was asking for a minimum of 30% down for a condo resale (conforming loan) in a fully-sold small building, but they were willing to give me a 10% down loan for a fifth-floor walk up in central Harlem.

So basically in your opinions if you want a condo thats worth a mil,having a 25% down with 700 credit rating would seal the deal faster than just depending on excellent credit and 10% down ?

Hey everyone I am new to this forum and looking forward to learning about NYC real estate trends. Regarding this topic I believe the banks want to see more cash upfront then ever before. In reality if they lend to you at today's rates for 15, 20, 30 years they are making much less than years prior. That's why lending is so scarce. When the banks can make money on loan origination they will lend more.

10% down means that the bank will have to carry the loan vs 25% down loan will be sold to the gov't

On a practical angle, 10% down means you'll be forced to throw your money away on PMI every month until you've reached that magic 20% equity point. And by the way, proving to the bank that you've reached it is no small task, and requires more expense and legwork (appraisals, paperwork, etc.).

its not the buildings...

AR - That is an interesting data point re bank's requiring 30% down on condo resale, but not having problem with 10% down on walk-up in Harlem. I wonder if this is a sign that banks are doing more rigorous analysis of specific segments of the market and believe that condos are generally more likely to sustain greater than 10% decline in value, while walk-ups in Harlem never got a pop from the bubble (or did they? Part of reason I am asking is because I have no idea; I am not remotely well versed in NYC real estate market, which is what brought me to this board). It would then seem that bank is simply not able to take it to the next level and drill down to specific properties within the various segments of the market (i.e., they have come to conclusion that there is a real possibility that NYC condos could drop in value by more than 10% and they don't have the resources to distinguish between the needle in the haystack that sophisticated buyer might be able to find). Holding financials of buyer/mortgage applicant constant while varying type of property in question, that's what it suggests to me and makes some sense, but I would be curious as to whether that makes sense to you and defer entirely. If walk-ups in Harlem experienced the same bubble that condos experienced, then what you experienced makes no sense to me. There may also be other reasons why my suggested explanation makes no sense even if no bubble occurred Harlem walk-ups, and I would welcome any insight there.

What's even more likely is that the banks simply aren't liking dha's financials and are turning him(her) down not because of the buildings, but because of the size of the mortgage he/she is seeking.

NYCMatt - What is your take on what AR experienced per post above where bank was willing to lend with 10% down on walk-up but not on condo? She writes "Banks hate condo resales. I had one bank that was asking for a minimum of 30% down for a condo resale (conforming loan) in a fully-sold small building, but they were willing to give me a 10% down loan for a fifth-floor walk up in central Harlem."

P.S. to NYCMatt - Is it that banks might be willing to do 10% down on a mortgage of $X, but not on a mortgage of $3X?

>I wonder if this is a sign that banks are doing more rigorous analysis of specific segments of the market and believe that condos are generally more likely to sustain greater than 10% decline in value, while walk-ups in Harlem never got a pop from the bubble (or did they?

It's likely they don't need that rigorous analysis and are just going by boilerplate stats.
To guess, condos are likely overpriced on the flip. They are sold more frequently for the obvious reasons and have more volatility in price because of it.
The condo buyer is probably getting caught short much more frequently.
Banks also likely realizing better than the average purchaser those tax abatements many condos get hit the owner and/or the sale of the unit quite hard.

I imagine the last crash had many more defaults on condo owners as they were more likely to be a less than 3 year old purchase than a coop.

I take what many people say here with a grain of salt. AR didn't provide enough info for analysis.

"I imagine the last crash had many more defaults on condo owners as they were more likely to be a less than 3 year old purchase than a coop."

And they were likely more over-leveraged than co-op owners because they didn't have co-op boards keeping them honest ...

>Banks also likely realizing better than the average purchaser those tax abatements many condos get hit the owner and/or the sale of the unit quite hard.

Have no idea what I wrote here, and rereading it, I don't even know how to correct it LOL.
Let's just say, "many new condos have tax abatements that hit the unit's maintenance later like a poison pill."

truthskr10 - what you say is consistent with what I have encountered in researching a few units. Thanks for input and btw, I just recommended "State of Fear" to somebody.

NYCMatt - Agreed not enough info for analysis. Sometimes a post will raise questions and I want to ask for more data (e.g., in this case to AR: were all variables constant except the property at issue?), but I don't want to pry. Personally I posted a data point in another thread at some point on here regarding gain that we made on property purchased in 2006 and sold in 2010. Material facts I omitted were (1) the property that we purchased in 2006 was never formally on the market, but rather came to us through word of mouth and knowing indirectly the people who wanted out of the property; (2) when we sold the property in 2010, we did it FSBO, which many would not be capable of doing, so while we made a great gain in a difficult time period, we were well positioned to do that and our experience was an outlier.

NYCNovice, Haha,just last week I gave a copy to my 17 year old nephews(s if for twins) to read.
I think it is required reading, just as much as "Who killed the electric car" is a must watch.

Google me! I can help. "Joe Leffe"

Google me! I can help. "Joe Leffe"

It seems this board loves to hate NYCMAtt but the thing is: he is very often entirely correct. I have (do) worked in underwriting for large banks for many years and can tell you that a 700K purchase with 10% down @ let's say $125K salary will be a certain no go. Won’t even make it the UW department most likely.

Nobody thinks they will default. That's just reality.

10% down is not a terribly attractive cushion for someone under-writing your loan. Also what we're seeing is that banks will originate loans, there is credit, but guidelines are more reasonable from a sound under-writing perspective.

dha:

1. how many units do your delined buildings have
2. are they known for legal or construction problems