Quote:
Originally Posted by jazzman
We found that island properties didn't meet fanniemae/freddiemac lending guidelines even with nearly 50% down. Not sure if this extended to all seasonal places or if it was a no public road thing. Banks were of course happy to do private portfolio loans at 5+% fixed for 30 years.
We eventually found Franklin Savings Bank had a special agreement with fanniemae that let our loan go through.
Then you find out that everything on the lakefront is considered a flood zone these days...
Then you find out that most insurance companies don't do houses on piers...
Then you find out that the bank appraisal system is pretty random on island properties.
Lots of hurdles... These have to be taking some number of potential buyers off the books.
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Hit the nail on the head...
If the property doesn't meet fanny/freddy guidelines, it's a property that is only going to move to a cash buyer, or you're stuck having to screw with a construction loan to get the property to those standards and flip to a conventional loan. Can you say headache of epic proportions?
Insurance companies don't particularly care for seasonal properties period, even if they are on a full foundation. Not an impossible hurdle to overcome, just takes lots of explanation.
The appraisals are another killer since there is so much variation in water front never mind island property. It's not like most places are cookie cutter subdivisions, with lots of "like features", no you're stuck comparing apples and oranges which skew the comparable features to "like sold properties" and to much adjustment there raises red flags to the underwriters.
The key thing is to find the right lender that has the ability to deal with a little adversity. They are out there, stick with a local bank and you may find things are much easier than you have experienced thus far.