Condo Conversion Loans are for the purpose of taking an existing
Multi-family project (Apartments) that are based on rental income
from long term or short term lease agreements and converting the use
of the property to a For-Sale product in the form of units for sale as
SFR Condominium ownership units.
Usually the proceeds of the loan are used for re-positioning the
property, upgrading units to match competing condominium units in the
surrounding market and payoff of the existing underlying long-term debt.
Retirement of the Condo Conversion loan comes through principal loan
reductions as each unit is sold and a percentage of each sale after
sales commissions and closings costs are applied to the principal
loan balance. The Condo Conversion Loan can also be structured for
the acquisition of an existing property by a new owner for the purpose
of condo conversion and sale.
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