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Law Educator, Esq.
Law Educator, Esq., Attorney
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Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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Effect of a historic landmark designation on a mortgage?

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This is a new question for you Paul. What effect does the presence of a historic landmark designation of a housing cooperative corporation property have on obtaining a mortgage for that property? Examples would be appreciated.......

General lenders are not going to mortgage a historic property because they are more concerned with current values and not interested in the restrictions having a historic property places on the property. Loans on a historic properly typically come from the FHA or through the local historic preservation society which has agreements with private lenders and even has access to grant money both private and government grant money to make repairs or renovations to the historic property.

The other reason lenders do not want to be involved with historic property is because in the event of foreclosure they cannot get rid of any of the restrictions on the deed and cannot get rid of the easement, so it makes it very tough for them to sell if they have to do so.


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Customer: replied 4 years ago.

Paul


 


Perhaps if the housing cooperative corporation property is a very large one and 100% of the shareholders have to approve of it being sold, what you have said about a lender being unwilling to mortgage that property, would not apply? A response would be appreciated.

My point was that in the event of a default on the property, the lender is limited in their ability of disposing of the property. The lender cannot just foreclose and then sell it at auction because of the restrictions on the property as a historic property.
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