New York City Real Estate Sales & Rentals

Mortgage Financing

Financing Is Readily Available For Foreign Buyers
Interest rates are at record lows, so whether you are a foreign buyer or US resident, it is a great time to finance a real estate purchase in Manhattan.
Foreign Buyers – Down Payment Requirement Reduced To 30%
 HSBC recently lowered the down payment requirement for a second home purchase in New York City from 40% to 30% for its Foreign Buyer Mortgage Program, a strong sign that the New York City real estate market has come full circle.
30% Down Payment Program

Under the 30% down payment program (70% Loan-to-Value), there are specific criteria that the building must meet: over 90% of the units must be sold; no more than 10% of the units can be owned by one individual/entity; no more than 20% of the building can be commercial; final certificates of occupancy must have been issued for all apartments; and the homeowners’ association must have control of the building. This program requires 12 months of reserves and the maximum loan amount is $1,500,000.

If the building doesn’t meet the specific criteria above, for example, if the building is only 60% sold, the bank still may grant a mortgage; however, HSBC would require a 50% down payment (or 50% Loan-to-Value). This program requires 36 months of reserves and the maximum loan amount is $1,500,000.

Other requirements of both programs:

· Must be an HSBC Premiere client ($100,000 on deposit – this could be in the form of cash or investments)

Interest rates are the same for each of these programs. As of December 1, 2011, interest rates were:

5-year adjustable 3.375%

7-year adjustable 3.75%

10-year adjustable 4.25%

30-year fixed 5.25% (not available for 50% program)

 Foreign Buyer – Commercial Mortgage 50% Down Payment Program
HSBC recently established a program that would allow foreign buyers to finance a commercial real estate purchase (i.e., retail, office, industrial, multi-family). A minimum 50% down payment is required for commercial investments. While individual condos are not expressly permitted, they may be accepted on a case-by-case basis. The building should meet the same criteria as the 30% down payment residential program. The commercial program requires 24 months of reserves and the maximum loan amount is $1,500,000. Interest rates are slightly higher for a commercial property mortgage.
 US Residents

For US citizens living and working in the US for the last two years who have an established 720+ credit history, down payment amounts vary depending upon the loan amount.

20% down payment (80% Loan-to-Value) up to $2,000,000 maximum loan amount
25% down payment (75% Loan-to-Value) up to $3,000,000 maximum loan amount
35% down payment (65% Loan-to-Value) up to $4,000,000 maximum loan amount
40% down payment (60% Loan-to-Value) up to $5,000,000 maximum loan amount

In addition, for a US citizen buying a second home, a 25% down payment (75% Loan-to-Value) is required. Interest rates for US citizens are .25% less than the rates shown above for foreign buyers.

 

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