Our clients needed a rate-and-term refinance of the private note on their investment condo unit in the ultra-high-end Jade Signature, recently named as a top ten international skyscraper. Their primary goal was to lower their 9.75% interest rate and increase the property’s monthly rental income cash flow.
However, our clients faced several challenges. First, they were foreign nationals from Venezuela. Most lenders refuse to lend to Venezuelan borrowers due to the risk associated with that country, especially because it is on the OFAC list.
Second, since all their employment income derived from activities in Venezuela, they were unable to show income through U.S. tax returns. This rendered our clients non-bankable, as traditional banks and lenders require at least 2 years of U.S. tax returns to qualify for a loan.
Third, the condominium association was involved in pending litigation, including defending a lawsuit by a neighboring building concerning negligence for construction matters. This created an additional risk that traditional lenders shy away from.
We helped our client with a loan program that solved all their issues. Our lender had more relaxed guidelines:
- Venezuela was not on our lender’s restricted countries list, so our clients’ citizenship was not an issue.
- Our lender allows foreign nationals to show their income through reduced documentation, so there was no need to provide any tax returns. Instead, our clients simply provided CPA and employment letters stating their income.
- Finally, we researched the condo association litigation and provided documentation that the litigation was covered by the association’s insurance carrier and that the reasonably anticipated damages would not exceed 10% of the association’s funded reserves.
Ultimately, we provided our clients with a $2.1 million rate-and-term refinance at 60% loan-to-value (LTV), lowering their interest rate from 9.75% to 5.375%.
With their interest rate cut nearly in half, our clients achieved their goal of increasing their cash flow from their rental investment property.
To learn more about our loan programs for foreign nationals, please visit home loans for foreign nationals and other non-U.S. citizens.
