Condo Construction Financing Can Be Very Complex
For a condo development project, the capital requirements for condo construction financing can be very complex to manage through.
To start with, because there is no guarantee that condo registration will ever be acheived, the financing assessment starts as townhouse financing, which generates a much lower fair market value per finished unit than.
The result is a much lower level of leverage at the start of the project.
Second, when the construction gets completed, there still may be a delay before condo registration is received requiring an interim financing of condo inventory to potentially raise enough additional capital to continue to cash flow the project