With litigation in the building, is it possible to get financing in the Glass House Denver?
Posted by Mic Ortega on Thursday, August 16th, 2012 at 11:24am.
Is it possible to get financing in The Glass House right now? It is a problem I have been running into lately with some great new listings coming on the market in there and buyers wanting to buy, but having trouble getting financing. The answer is yes, you can get financing, but there are conditions.
According to the homeowners association for the Glass House, the litigation involves the air conditioning system in the building not being installed properly by the developer when it was built. It isn’t a major problem like some condo buildings see, but it will probably take at least 18 months to sort out.
What this means to buyers and sellers in the building is that as long as the litigation is going on, the building will be non-warrantable. Non-warrantable condo loans cannot be sold to Fannie Mae or Freddie Mac which is where 99% of all loans are sold. With no way to sell the loan, lenders and banks won’t lend in the building.
So in order to get financing in the building, buyers must then find lenders who fund and keep their loans and don’t sell them after the loan closes. There are a number of local banks in town who do offer these type of loans, namely First Bank, Vectra Bank and Bank of the West. The only drawback with these type of loans is that most won’t offer a traditional 30 year fixed loan. Instead, they will offer a 7 year adjustable rate mortgage. If getting into the building is your goal, then this could be a viable option since once the litigation is over, it should be easy to refinance and there are great deals in there right now.
If you are interested as to what is available and some good lending contacts, definitely let me know. I believe The Glass House will remain one of the most desirable buildings in Downtown Denver, it may just be a little tougher to get in there for the time being.
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