1/4/24 – Condo’s – Your listing could be screwed! Very Important!

Condo update! Very important!!!

We have a couple of Non-warrantable lenders that lend money to complexes on the naughty list! Most of those condos/townhomes are on the list due to lack of insurance, and now the biggest lender that gave us no hassles is pulling out of specific complexes due to oversaturation and risk! Below is the list of complexes that will now be affected! This list is fluid and could change.

1. Bridgewater, Emeryville - Insurance issues
2. American Beauty Village, Santa Clarita - West has insurance issues – East will get renewed February 28, 2024, and will likely be deemed non-warrantable.
3. Cabrini Villas, Burbank - Maybe able to do 10% down, please provide specific address & LTV & occupancy.
4. Morada, San Diego - Insurance issues.
5. Parkwoods, Oakland - Insurance issues.
6. The Summit, San Diego - Insurance issues
7. The Met at Warner Center, Woodland Hills - Due to the project size, we can lend with 10% down on the project side that is on Burbank and Owensmouth. They are no longer lending for the project section on Canoga.
8. West Creek and West Hill Valencia, CA - Insurance

We have other banks we can do these loans, but they are not as lenient on the insurance issues, and there is no California Fair Plan for mortgages! The best we can do on the above complexes is 75% LTV, and the lack of insurance will be a challenge!

Again, loans in these complexes are 25% down until further notice, and they will look at the insurance and decide on a case-by-case basis if they will do a loan! I know what you are thinking, Holy shit! Yup, me too!

We are actively looking for new resources that will lend to these complexes. Every broker in town went to the same lender to close loans in these complexes, so we will likely see more of the complexes below go on the do-not-lend list!

We can still do loans on all other non-warrantable condos with 10% down.

If you have a condo seller looking to sell, you better get that house on the market ASAP! If you have a condo buyer looking to buy, you better get them in escrow pronto!

Here is one solution if you have a seller: We can do cash out 2nd mortgage to get them a down payment on their next home. A Home Equity Loan or a Home Equity Line of Credit can hold the property for a couple of years until this insurance thing is fixed. In the meantime, they can be happy landlords! Yes, second mortgage lenders don’t ask for HOA information!

Here is a solution if you have a buyer for these complexes: I don’t have one, but you will have some investors jump in and pay cash when the prices go down. Do some seller carrybacks if your sellers have enough equity. Show them something else? This whole paragraph is awful. I am sorry to be the bearer of bad news!

One last thing! BE CAREFUL!!! Lenders will say they can do something because they are desperate for business, and at the end of the day, they will not be able to do this. Please allow me to talk with them and give you advice. This is not an easy market, and this is not an easy email as I like to provide solutions.

Next Tuesday I will email about the condos above and how you can get an equity line or loan and move up! I assume everyone who wants to sell has a 3% rate, and a small second will get them out of the condo and into a house! Rental income will offset the mortgage, they will get a newfound tax write-off, and if they sell within three years, they will likely have no Capital Gains!

Condo / Townhome issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE:

1. Scenic Hills – Insurance
2. Mariposa – Litigation semi-cleared! Insurance a mess!
3. Bouquet Canyon Village – Insurance
4. Madison – Litigation – I heard an FHA loan closed in there! I am trying to find out if it is an underwriter error, or will it be okay to do FHA loans there?
5. Cornerstone – Insurance
6. Canyon Oaks – Insurance
7. Brookside Walk – Insurance – NEW as of last week
8. Shadow Ridge – Oak Park – Insurance
9. Sierra Glen Condos – Insurance
10. American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough!

Please let me know if you hear anything new on condos or townhouses.

Interest rates are a bit higher today, but that is not the biggest issue today.

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA) are in the high 5’s and low 6’s
• Conventional Loans up to $765,550.00 are in the low to mid 6’s
• High Balance Loans $765,550.00-$ 1,148,325.00 are in the mid to high 6’s
• Jumbo loans above $1,148,325 are in 6’s
• Bank statement loans - They are available with 10% down again! 8’s and 9’s depending on down and credit score.
• No income qualifier – 40% down with reserves! In the 8’s!
• 0 down loans are in the high 7’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - typically 7.500% with limited fees – and they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until February 2024???
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am available all weekend if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text (661-714-6258) or email me at Mike@AugustaFinancial.com.

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!