Finding super jumbo lenders that offer both a high loan amount and a high loan-to-value can be challenging. We helped our client get approved for over $6 million up to 80% LTV.
Loan Amount:
$6,146,900.00
Loan Amount:
$6,146,900.00
- Location: Longboat Key, Florida
- Property Type: Pre-Construction Condo
- Transaction Type: Purchase
- Loan Amount: $6,146,900.00
- LTV: 75%
- Wow Factor: Super Jumbo Loan Amount and High LTV
The Challenge
In 2021, our client executed a contract to purchase a pre-construction condo for $8.2 million in The Residences at The St. Regis in Longboat Key, Florida overlooking the Gulf of Mexico. A resident of Ohio and CEO of a real estate investment and development firm headquartered in Georgia, he intended to use the new 6,300 square foot condo as a vacation home for his family.
In early 2024, when the builder advised him the anticipated construction completion date would be June 2024, he reached out to us for a mortgage loan.
The challenges to overcome were two-fold.
First, unlike established condos, finding a lender willing to lend on a pre-construction condo is difficult. Pre-construction condos are often “non-warrantable,” meaning they do not satisfy Fannie Mae guidelines. New construction condos typically come with several risk factors. Common areas may still be under construction, the developer may still have control of the condo association, budget reserves may be low, or not enough units have been sold yet.
Second, our client’s pain point was securing a loan amount high enough that would not require him to pay anything at the closing table. By early 2024, he had already paid 30% in earnest money deposits, or $2.46M. Therefore, he was seeking at least $6M at an LTV of about 75% to cover the remaining purchase price and his closing costs. However, super jumbo lenders are scarce and those offering $6M loan amounts typically cap the LTV at 50% to 60%.
The Solution
Within a week of submitting his file to the bank, we got him prequalified for up to $6.5M at a maximum LTV of 80%.
His upward-trending tax returns, great credit score, and plentiful post-closing reserves were strong compensating factors that the lender considered to offset the risk associated with the high loan amount and pre-construction status of the property.
As a condition of getting the loan, the bank required our client to open an account and enter into a depository relationship with them.
The Result
After going through a streamlined underwriting process where only 1 appraisal was required, and after the St. Regis obtained the certificate of occupancy (CO), the bank cleared our client’s loan to close.
Even though he was approved for up to 80% LTV, he ultimately only needed 75% LTV at a loan amount of $6,146,900 to cover his remaining down payment and closing costs.
Therefore, our client achieved his goal of not having to pay anything at the closing table.
His interest rate was competitive and he chose an adjustable-rate mortgage, amortized over 30 years, with the rate fixed for the first 10 years. He also opted for interest-only payments instead of principal-and-interest payments.
Our client and his family look forward to enjoying their tranquil escape on the sugar-white sandy beaches of the Gulf of Mexico for many years to come.
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DAK Mortgage is a licensed mortgage broker that can navigate you through the process of finding the right loan for your needs.
