The first condominium building at the $1 billion Metropica development in Sunrise has received conditional approval from government mortgage company Fannie Mae, a designation that makes the project more appealing to buyers in need of financing, industry professionals say.
YOO at Metropica buyers will be able to qualify for mortgages with as little as 5 percent down payments on primary residences, 10 percent for second homes and 20 percent for investment properties. Fannie is expected to issue final approval for the loan program when the building is complete in 2017 and the developer fulfills certain requirements.
During the housing bust, Fannie stopped allowing individual lenders to issue loan approvals statewide for new condos, meaning “domestic buyers have had few options for reliable, low-interest-rate loans all throughout Florida,” Jeffrey Brown, manager of the developer services division for mortgage banker New Penn Financial, said in an email.
New Penn helped the Trillist Cos., developer of YOO, obtain the Fannie Mae designation.
KGH International Development is building the 65-acre, mixed-use Metropica west of the Sawgrass Mills mall, at the northeast corner of Sunrise Boulevard and Northwest 136th Avenue.
Fannie Mae and Freddie Mac back more than half of all home loans nationwide. Freddie doesn’t issue its own condo approvals but typically accepts those from Fannie.
The vast majority of new condo buildings across Florida aren’t approved by Fannie. Buyers typically pay cash or struggle to get loans from small lenders.
“I’ve had a number of condo buyers who, when it came to financing, had to regroup,” said Beverly Rothstein, a real estate agent for Berkshire Hathaway Home Sales in Broward and Palm Beach counties. “This will open sales up [at YOO] and bring a lot more people to the table.”
International buyers paying cash have played a large role in South Florida’s condo rebound over the past few years, particularly in Miami-Dade and Broward counties. But housing experts say developers will increasingly have to court domestic buyers.
“You hear more and more from people about the slowdown of the international marketplace,” said David Reich, director of development for Trillist.
Last fall, the firm started building the 28-story YOO. The 263 units are priced from about $300,000 to more than $1 million.
Despite longer-term concerns that demand for condos may slow, plans call for a total of eight towers at Metropica.
When Metropica is finished in five to seven years, it will have about 1,900 condos, 345 apartments, a hotel, 400,000 square feet of retail and 150,000 square feet of offices, according to KGH. An additional 500,000 square feet of offices also could be developed, depending on market demand.
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