# Historic Building Conversion



## Mall Guy (Sep 14, 2011)

Hi, I have purchased a condo in a historic building conversion (Bloor West - Toronto), and am getting a lot of push back from lenders because it's a conversion. Anyone had similar experiences. With all the loft conversions going on, I was not expecting this, and am not getting competitive rates at all. Is my mortgage broker leading me a stay?


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## Just a Guy (Mar 27, 2012)

No, I've seen this before as well. Banks got burned on some condo conversions that sold for a small fortune during the boom and, when the reality that people basically bought an apartment set in and their values returned to earth...plus most didn't have proper reserve funds, maintenance, etc. so the bank got back properties worth half or less, and owed thousands in arrears to boot...so a lot have backed away from financing them. 

Of course, if you can prove your building is adequately funded, you can usually get exceptions...or try a different lender, there is always someone willing to loan you money...you may be better off talking to your bank directly if you have a history with them.


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## Mortgage u/w (Feb 6, 2014)

Very common. Its not so much the lenders but the mortgage insurers (specifically the private ones; Genworth, CG) that are pushing back on these types of properties. The risk is very high. Being a mortgage underwriter as well as a home inspector, I have experienced many problematic conversions so I would agree with the push-back you are getting. The percentage of poorly built and poorly managed condo conversions is extremely high and resale value takes a big hit should problems arise.

If your condo is 'undivided', you are VERY limited to the lenders that will accept this type of property. If its indeed 'divided', you should have an easier time. What the insurer looks for mainly is if the co-op is established and registered on title. 

You're best option is to finance the condo without mortgage insurance ie; put min 20% downpayment. Virtual lenders will be more open to that so have your mortgage broker seek the best suited lender for you.


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## Mall Guy (Sep 14, 2011)

Thanks for the responses. This is the feedback I was getting. Received a commitment letter today from a credit union (@ 2.99%) which I signed before they could change their mind !!!


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## Cal (Jun 17, 2009)

As a side note, a friend bought a condo that was converted from an office tower (don mills and eglinton area) and the builder cut alot of corners/costs by not placing 1 new elevator shaft, and leaving the 3 original ones....so that meant it took him 3 elevators to get to his parking spot. Crazy. But I am sure the builder saved alot of $.

I have no doubts you will keep close attention to the conversion.


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