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Welcome to your constantly updated resource for news and views on the Brookline Real Estate market. Here you will find commentary and statistics to explain the daily changes in the Brookline specific housing market.

Whether you're looking for an estate in Cottage Farm, a condo in Brookline Village or are just stopping by please feel free to read along and comment at will. If you are interested in speaking about renting an apartment, buyer representation or listing your home please feel free to contact me.

Friday, January 18, 2008

Lending Issues with New Condo Conversions

On Wednesday I made reference to changes within the lending industry that will not get much national media play but will be critical to North Brookline buyers. New condo conversions are any apartments buildings that are being occupied by individual owners for the first time. Typically lenders would waive their owner occupancy ratio limits for new conversions because it would be impossible for a new conversion to have any owner occupancy. For any buyer who was paying less than 20% down at closing the lenders were required only to do a "limited review" of the condominium.

From 2003-2007 properties like Cypress Lofts, Longwood Towers, The Warwick and Washington on the Square became popular with many people who did not necessarily want or have the ability to put 20% down. The appreciation rate was so steep that it made sense to put down as little as possible (in some cases $0 down) to grow your investment. With these limited reviews the first owners of a condo building (whether 4 units or 400) would get by without the viability of the overall project being questioned by the lender.

What's happening today is almost all lenders are calling for an immediate "full review" of the condominiums for any buyer who puts down less than the "standard" 20%. This will mean that everyone who buys early into the project will need to put down more money than the last buyers will to get loan approval. This also means that in some of our neighboring markets like Allston and Brighton buildings which have a high number of rented units will also be subject to these reviews. The only buildings that will be exempt are buildings in which the sale in question would put the owner occupancy at 50% or higher.


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The views expressed on these pages are the opinion of the author and any public contributors. They do not substitute for the advice of a legal or financial professional. These opinions are not representative of any firm or business. Please always consult an attorney, financial professional or sign a contract with a Buyer Agent or Seller's Agent for specific advice.