Financing Non-Warrantable Condominiums with Asset Depletion

Standard lender guidelines preclude financing on condo projects in which any single entity controls more than 2 units or 10% of a project. I have a great funding source that has no restrictions regarding the number of units or percentage of units controlled by a single entity (such as the developer or an investor). They are fine with either new developments or established projects where control has been turned over to the HOA. The investor offers 80% financing to $3,000,000 and even allows for Asset Depletion as a supplemental income source (see below). Here is a bit more information on this great program:
  • Offered for Primary Residences or Second Homes, only.
  • 80% financing offered to $3,000,000.
  • Flexibility with income qualification. Lender allows for Asset Depletion to qualify and will blend with other income sources!
  • Commercial Space is permitted and there's no restriction on percentages as long as it's common for marketplace. (If uncommon, the buyer can increase their down payment.)
  • Ownership concentration is not an issue for both new developments and established projects. (90% + concentration is acceptable!)
  • Credit scores as low as 680.
  • Debt ratios are held to 40%...but there is flexibility with income sources.

Regarding Asset Depletion, if the borrower's assets are substantial, the underwriter will apply a formula to calculate supplemental income that can be added to all regular income sources such as salary, pension, social security, etc. to help qualify for the loan. The borrower does not need to cash in their assets, but is essentially given credit in the form of a hypothecated income source.

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