No NMLS lender ok?

Question

I am buying a condo hotel. The loans are more difficult to get as expected but one lender and a good rate except one. However, they are a commercial lender apparently (not residential) and have no NMLS. Is it legit? Also, They are asking for a $2k engagement fee and claim the appraisal for a single condo is $2.5k. Should I even trust such business?

Dustin Lauer · Answer

Old post but stumbled onto it with condotel mentioned.  Not all states require an NMLS license for all types of loans.  Condotels are unique for financing and unique lenders might not have an NMLS ID if they do commercial loans in particular states without the requirements for the licensure.

Richard Scholtz · Answer

@matt smith

RUN --  A FNMA appraisal will cost no more then 700-1000 for a multifamily 4 plex....so figure a condo to be less.

There are local savings and loans that will offer portfolio loans --meaning they are NOT tied to FNMA condo qualifications and  they will want NO MONEY upfront until they order an appraisal.

You just need to tell them it is a NON WARRANTABLE project... and they will be very similarly priced to FNMA rates....under 4.5% 30 year fixed.

Make those calls to local Savings and Loans and Federal Credit Unions....in your town.

Warrantable Condominium Definition: A warrantable condominium is a condominium that meets

standard Agency guidelines and is therefore eligible for delivery to FNMA and FHLMC. This definition

does not apply to FHA insured or VA guaranteed loans. Guidelines include but are not limited to pre-sale

requirements, occupancy requirements and LTV/TLTV restrictions. Guidelines for warrantable

condominiums are subsequently outlined in these guidelines.

Non-Warrantable Condominium Definition: A non-warrantable condominium is a condominium that

does NOT meet standard Agency guidelines and is therefore not eligible for delivery to FNMA and

FHLMC. Guidelines for non-warrantable condominiums are NOT outlined in these guidelines.

Brad Stuteville · Answer

Matt,  NMLS is only required when dealing with consumer real estate transactions, so a commercial lender doesn't really need one.  Is this lender with a bank or private?

Engagement fee depends on the deal, is this due up front as a deposit for the appraisal or due at closing?

Appraisal really depends... I've seen many expensive appraisals and I'm not familiar with prices in Cal, but it does seem very high for a single unit.