Condo loans for 4-unit San Francisco converted property?

Asked by Joe B., San Francisco, CA Mon Jun 21, 2010

I own a 4-unit apartment building in San Francisco that has been converted to condominiums. I am one of 3 owners and we live in 3 units, and we rent out the 4th unit. We want to refinance all 4 units into 4 individual condo loans, but we have been told by the large banks that the loans are non-conforming because each owner holds more than 1 unit (1.33 units each), which violates Fannie Mae/Freddie Mac condo guidelines. Can anyone help with advice on how to deal with this refinance without having to sell the 4th unit? Also how would I find a lender or broker for these loans if they are truely "non-conforming"?

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Jeff Bell, , Kirkland, WA
Tue Jun 22, 2010
There are ways to get these properties refinanced with conventional loans. Each unit (and owner) would be looked at separately to determine qualification of their specific units, and again for the fourth unit. Although it does not meet Fannie guides, exceptions can be made for this. We have done several.

Jeff Bell
Cobalt Mortgage
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Cameron Bamb…, Agent, San Francisco, CA
Mon Jun 21, 2010
Hello, I also have a couple of mortgage brokers who can help.
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Lance King, Agent, San Francisco, CA
Mon Jun 21, 2010

Not all lenders are beholden to FM guidelines. If you send me an email I can send you a couple of referrals.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
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Matt Puzz, , Phoenix, AZ
Mon Jun 21, 2010
I think I can do this but I need some more information because it is not going to be easy. If you are willing to give me more information, I need to check with my investors in order to make it happen but the more information I have the more likely I can help you out.

Matt Puzz
Amerifirs Financial
Mortgage Banker lending in AZ, CA, and NM
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Eric J Soder…, , Pleasanton, CA
Mon Jun 21, 2010
There are lenders that specifically deal with Tenant In Common loans". They fall under two categories.

1: Conventional TIC Loans. The problem here is everyone needs to qualify. It is not the same as a conventional loan!

2: Fractional Loans. This is where the TIC lending is heading. This allows owners to refinance or purchase just their unit. A property must be one or the other with regards to the type of loan. Contact one of the lenders below to get additional information.

Check with a CPA before making any decisions.

Best Regards,

Eric Soderlund

Sterling Bank
Circle Bank
Bank of Marin
0 votes
Chrisnoceti, , San Francisco, CA
Mon Jun 21, 2010
Good afternoon Joe -

We have run into this situation many times and believe it or not, I have a solution for you! Most of the lenders you are speaking with are unfamiliar with condominium lending and the rules and regulations surrounding this portion of the industry. Although their underwriters and guidelines are clearly stating that one owner cannot own more than 25% of the building, or in your case 33% each of a 4 unit building, what they don't know is if presented correctly, Fannie Mae could possibly grant an exception. We are experts at positioning and submitting our files to Fannie Mae and have about a 90% success rate at achieving these exceptions with Fannie Mae. I would be more than happy to take a closer look, analyzing the situation, and providing you with my professional opinion. Feel free to contact me at;

Christopher Noceti
MetLife Home Loans
Specializing in Condominium Financing
(415) 655-4986
0 votes
Eric Castong…, Agent, San Francisco, CA
Mon Jun 21, 2010
Try First Republic. I have a client who owns all four units in a four unit building and 3 are tenant occupied. They are a portfolio lender. You won't get fixed rates-prob a 5 year fixed.

If you need a referral, let me know. Good luck.

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