Richard Uhl, real estate loan manager for First Interstate Bank in Jackson, and his associates visited the Sotheby’s office this morning to discuss the current lending climate. About a dozen agents took advantage.
Beyond reiterating what we’ve all known for more than a year – lending guidelines for real estate transactions are very tight these days – Uhl and his team spent most of the half-hour discussion on the eligibility of condo projects for financing. For many, there just simply isn’t any available on the secondary market.
“If it looks, smells, tastes like a condo hotel, we can’t do it,” said Uhl, referring to developments such as Four Seasons, Teton Mountain Lodge and other similar Teton Village properties.
Characteristics that will likely make projects ineligible under Fannie Mae guidelines, include:
- Projects that include the words “hotel” or “motel”;
- Projects that restrict the owner’s ability to occupy the unit;
- Projects that include registration services or offer daily rentals;
- Mixed-use developments, timeshare or segmented ownership projects, multi-dwelling unit condos, and more.
Commercial lending has also been tightened considerably, particularly to those investors without a prior relationship with a lender or a large portfolio.
But not all the lending news is bad. Rates remain near historic lows and clients with strong FICO scores – “740 is the magic number if you don’t want to pay additional fees,” said Uhl – and favorable debt to income ratios. Borrowers looking to finance single-family homes are finding attractive options, as the sales statistics for Jackson Hole real estate during the second half of 2009 confirm.
But how long will the fixed rate for a 30-year mortgage remain this low? As of today the rate is approximately 4.85 percent.
“I predict we’re going to see them go up beginning of next year,” Uhl said.
Contact me for more information from this meeting, an introduction to a local lender or to discuss financing possibilities for specific properties.