How difficult is it to obtain financing for live/work lofts zoned LAC4? I'm thinking about purchasing a short-sale in downtown LA.

Asked by Dtlaloftlover, Los Angeles, CA Tue Jan 25, 2011

What are the different financing options for lofts zoned LAC4? I am employed full-time at 65K and have a side business that is in the negative by about 2K (which I am in the middle of dissolving), so I don't have a chance at obtaining an SBA loan. My credit score is about 750 and and I want to put as little down as possible since I'm a first-time home buyer - are there any websites or lenders that work with these types of properties?

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Louwu, , Irvine, CA
Wed Jan 26, 2011
I've done the Live/Work lofts in LA with LAC4 zoning. You got two problems with the live/work area:

1) Solvency of the HOA - no one realizes this but solvency of the HOA is crucial to making a deal like this work. Very rarely does a mortgage agent check the CC&Rs of the HOA to make sure it conforms to fannie/freddie guidelines. If your HOA is in financial distress, then your loan won't fund no matter where you go. The reason I bring this up is because with all the short sales, a lot of HOAs are becoming insolvent OR they have so many accounts payables in areas that it screws up their reserves. (HOA need to be financially fit and have adequate reserve for a loan to be approved).

2) Zoning issue. A C4 zone in LA has the following uses (per the LA Zoning Guidebook) - C2 uses with limitations and (most importantly) R4 uses. R4 zone in LA allows for R3 uses (which is Apartment buildings). So ALTHOUGH you are zoned C4, YOU CAN get a residential loan. You do NOT need a commercial mortgage.

The key to making it work is to find a loan officer (cough - me :) ) who has done it before and has experience with quirky zoning issues (i'm closing one now in long beach with a commercial zoning that got grandfathered in with a residential use; this required a rebuild and zoning letter from the city). Although it is possible to put down less than 20%, I highly don't recommend it. Remember, all lenders have their quirks with zoning guidelines, regardless of what Fannie/Freddie allows.

If you need a prequalification, don't hesitate to give me a call. 949-870-2882.


1 vote
Lou, I may need your expertise. Email:
Flag Wed Aug 7, 2013
Corey Chambe…, Agent, Los Angeles, CA
Mon Dec 1, 2014
Loft financing is often different from traditional condos and houses. Most lenders cannot succeed at lending on lofts at all, or not with the rate, fees and terms that they normally charge. One of the biggest disasters that happens with Downtown lofts is that the lender says "yes, I'll hook you up" before they every consider the property. The underwriter checks the property weeks later, often after the buyer has already signed off on contingencies, and the buyer gets an unexpected and unsettling phone call that sounds something like, "of course we cannot lend on a commercial or industrial building; we are a residential lender." The buyer is then faced with delays, paying per diem to the seller or a failed transaction.

Buyers do not need to go through this disastrous scenario. Buyers and seller should both use Downtwon specialist Realtors(R) and loft specialist lenders to make sure the right lender is lending on the right property.

Corey Chambers,
0 votes
Richard "RJ"…, Agent, Beverly Hills, CA
Wed Jan 26, 2011
Hi. I happen to specialize in loft sales in Downtown LA and depending on the building, financing is available. If you were to let me know which building is of interest to you, I can give you the specifics for that development. I have sold at least one unit in every building in downtown, so I can provide a lot of insight. I hope to hear from you. Always happy to assist.
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ - - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes
David Akram , Agent, Granada Hills, CA
Wed Jan 26, 2011
Hello DTLA,
It would be best if you spoke with a Loan officer to get a no obligation -pre-qualification breakdown as to how much you can afford and that are feasible based on the specifics of the property of interest.

Let me know if you need a referral for a loan officer.

David Akram
Realtor, DRE# 01891274
Century 21 All Moves
Web Reference:
0 votes
Cricket Yee, Agent, Sherman Oaks, CA
Wed Jan 26, 2011
Hi Loft Lover, it is in general really difficult to get financing on these, of course it depends on the development and the price point you are looking at. I have a referral if you'd like that I know has had some success with the 801 S. Grand Ave (Sky Lofts).
0 votes
Deborah Brem…, Agent, Los Angeles, CA
Wed Jan 26, 2011
The listing agent and/ or existing lender may be able to steer you in the right direction.
Stay away from websites for financing; promises are often made without being kept.
Do find a qualified mortgage broker/ direct lender who will shop the loan for you after assessing your qualifications.
If you need a referral, I am happy to help.
Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) 818.564.6591
0 votes
Rebecca Cham…, , Palos Verdes Estates, CA
Wed Jan 26, 2011
Live work buildings are super hard to get financing for...There are lots of criteria involving how full the building is and how full with owner occupants. An SBA loan isn't going to fund the purchase of a residence, even if you do work there. Any lender can help you, but I'd get a direct referral and be sure they've funded live/work lofts. You also may want to check with the lender who carries the loan on the unit currently.
0 votes
Ron Escobar -…, Agent, Beverly Hills, CA
Wed Jan 26, 2011
You can definitely buy something, but the question is what and where.... generally speaking the more "hair" a deal has the more difficult and expensive it becomes... there are three legs to a Mortgage (1) Credit, (2) Collateral and (3) Income (ability to pay)....
It sounds like you are OK with leg #1, leg #2 you are probably complicating it too much with the zoning, but I would need to know more about it, (maybe you should buy a normal property) and leg #3 sounds like you have income, but not really (much hair here)... The lenders are gong to look at your last 2 years of income and then average that out... no room for "excuses" about it... it is whatit is...

Another item #4 would be employment history... it has to be stable for at least 3 past years and likely to continue... same industry, etc... (oh did I mention you have to have cash reserves in the bank and source of payment documented for at least 3 months)

It is complicated and you should work with a creative professional... I can refer you to one if you contact me directly.... However, wanting to put the least amount possible, getting the lowest rate, not wanting to pay fees, etc etc is often unattainable given all other parameters cited...

Best of luck!

Ron Escobar, MBA
Web Reference:
0 votes
Ryan Ole Hass, Agent, Santa Monica, CA
Tue Jan 25, 2011
Wow! All these great questions that are really best answered by a lender/loan officer.

Have you spoken with a lender? This is certainly a unusual question with your circumstances. I have someone who can help you with NO OBLIGATION, but I don't feel good giving advice to someone who is not my current client...but I always defer to the expert in the field of question. Hope you understand.

Good Luck.

Ryan Ole Hass | MBA
The Red Door Group L.A.
Keller Williams Realty Larchmont
DRE Lic# 01417826
0 votes
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