Fractional Ownership Properties
Fractional Ownership is a relatively new way of owning property, where the owner has title to the property, but is restricted in usage to the percentage of ownership. For example, a person with a 1/8 ownership of a property would be entitled to 6 ½ weeks per year of occupancy. This is becoming a very popular way for a customer to enjoy the benefits of ownership of a vacation property at a fraction of the cost.
Title to the property interest can be bought and sold by the individual owners, with no needed involvement of other owners of the same property. Each fractional project will disclose the specific details in their Covenants and Agreements, which are recorded with the deed.
A Homeowners Association (HOA) manages the property and charges a monthly fee, which normally includes taxes, insurance, and property maintenance.
Mortgage Loans are available from a limited number of lenders for Purchase and Refinance transactions. These loans are Adjustable Rate Mortgages, with the initial rate fixed for 3-10 years. Loan amounts are available to $1,000,000+. Interest-Only options are available on the 3 and 5 year loans.
Down-payment requirements vary by loan documentation type:
Full Documentation 20% Down
Stated Income 25% Down
Seller-Carried 2nd* 10% Down
*Only available if the property seller offers a second mortgage hold-back to the buyer.
Development Loans are available for developers and property owners building, developing, or converting properties to fractional ownership. These loans are designed to fund construction and development of needed amenities, and allow individual title to be conveyed to each purchaser.
Project Approval is required before loans can be closed in any development. Items needed for this approval include covenants, budgets, HOA Bylaws, and other pertinent information.
Mountain Mortgage Centers specialize obtaining the best financing for fractional ownership transactions. Contact Us for listings of approved projects or for obtaining approval on a new project.
