Proper financing has always been the single biggest challenge for the condos at the former Miller & Rhoads building on Broad Street.
Since the condos aren’t yet ‘warrantable’, buyers were having a difficult time getting lenders to approve their mortgage applications.
…conventional financing had dried up, notably for condominiums that didn’t meet guidelines set by Fannie Mae and Freddie Mac, government-sponsored entities that back mortgages.
The Miller & Rhoads condos do not meet Fannie and Freddie’s required occupancy levels. Also its ties to the hotel hinder approval.
Thankfully, the developer has been able to establish relationships with local banks to provide financing:
C&F Mortgage Corp. is offering a 20-year adjustable-rate loan with interest rates about a half percentage point higher than the going rate of about 5 percent on a conventional 30-year, fixed-rate loan. The Midlothian-based lender will fund up to 50 percent of the loan amount for a single loan or 80 percent on two mortgage loans for second-home buyers.
“We just got the program in place and we’re seeing some interest,” said Brandon Beswick, regional manager for C&F.
Others lenders on the project are Village Bank & Trust in Midlothian and Franklin Federal Savings Bank in Henrico County. “We go slowly into any project and limit our concentration of loans,” said Steven Lohr, executive vice president at Franklin Federal.
Franklin Federal is offering a 30-year fixed-rate loan for 80 percent of the loan amount with an interest rate of about 6 percent.
Moreover, the developer is holding paper thus reducing the down payment required:
The developer, New Orleans-based HRI Properties, will do second mortgages for 15 percent of the total purchase price, thereby allowing buyers to finance 95 percent of the cost.
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