Is it true this in mainly being sold to investors and is going to be full od NRAS
I just signed up for one of these
They have just flooded the radio in Brisbane with ads so I went in to have a look. In my case I will be cash flow positive right from the start which is great. I asked a lot of questions and did a lot of research and from what I have found out there are nearly 200 units in Chelsea and only 40 of them have NRAS allocations. Hope this helpswill it be easy to get finance for a small near city unit with NRAS tennants.
Depends on how small is small ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
THe one that I have reserved in the Chelsea is 60m2 – its a 1 bedroom with a carpark so from lending point of view it looks OK. Also there is no head lease which I understood from my research was making lending difficult
Thanks for your responce Richard on a 60sm unit with NRAS. Stand alone what would be the max LVR lend. And do you know what deposit is required for this development.
I am using other security so I dont have an LVR issue but I did look at the option of stand alone and I was told by my lender that maximium was 90%. I have paid a $500 deposit and I will be paying 10% after the cooling off period. I have the 10% in redraw but they did say that I could use a deposit bond if need be. The salesperson that I dealt with was really good and another family member has also purchased one off him too. If you want his details let me know.
You should double and triple check with your lender about this 90% approval they are promising. Its all well and good for them to say they will offer 90% LVR, but they aren't offering you anything more than a pre approval at this stage, and they are not obliged to offer unconditional approval later on down the track… have you been clear with them about the fact that the property has an NRAS allocation attached? Some people on these forums will try and convince you that NRAS finance is simple to obtain. Its not. Even if this was a completed unit, NRAS finance is offered by a limited number of lenders, and there are strict criteria attached. None offer NRAS finance to 90% LVR. The fact this is Off The Plan makes it even more critical that you double and triple check with your lender.
Because even if it wasnt NRAS, pre approvals for off the plan purchases are not worth the paper they are written on in many cases anyway. Firstly, the essence of Off The Plan buying is to take a punt that the value of the property in 12 or 18 months time, when built, is greater than what you paid for it today. It works really well in boom times, but because the property wont be valued until its near completion, you have no way of knowing how the valuation will look, that far ahead. What if rates have gone up 1.5% by then and the market has softened by 50k? Remember where rates were pre GFC, and where they are now. What if you have an injury or illness and lose an income, and cant qualify for a loan in 12, 15, 18 months time? What if the builders go bankrupt? There are alot of "what if's" with Off The Plan purchase, whether they are NRAS or not…
So you'd probably be interested in this. ….
The NRAS allocations for this development are held by UAHA ( Urban Affordable Housing Association). When the property is completed, you will enter into a Non Entity Joint venture agreement with them to receive your NRAS incentive. The UAHA NEJV model is approved by Firstmac. As far as I know, they are the only lender to approve the UAHA NEJV model, so far.
Firstmacs NRAS policy includes an 18 month advanced unconditional approval for off the plan NRAS purchases. In other words, for any Off The Plan NRAS developments which are due to be completed within 18 months – you can get unconditional approval today, for those purchases. Takes all the risks mentioned above, off the table. Guarantees your finance and settlement. There are some strict criteria though;
The maximum LVR is 80%
You must refinance another property to them also- to a max LVR of 80%. That refinance must provide the 20% plus costs for the NRAS purchase.They also have the best borrowing capacity for NRAS…
They use 65% Gross Market rental for servicing – to reflect the discounted NRAS rent. (usually lenders take 80% Gross Rental)
They use 100% of the NRAS incentive as tax free income.Anyway, something I thought you should know about. If I was buying Off The Plan, I would definitely be using this option. It seems a no brainer to me…
They have just flooded the radio in Brisbane with ads so I went in to have a look. In my case I will be cash flow positive right from the start which is great. I asked a lot of questions and did a lot of research and from what I have found out there are nearly 200 units in Chelsea and only 40 of them have NRAS allocations. Hope this helps
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