What makes a lease financeable?

Whether you are a borrower or a lender, if you are considering a loan supported by a ground lease, you need to be sure the ground lease is "financeable." A financeable ground lease includes either (a) "subordination" of the landlord's fee interest in the land or (b) provisions to protect the lender (as leasehold

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Fee Mortgage Provisions from a Ground Lease

Bronx New York Fee Mortgage Provisions from a Ground Lease

Name: Bronx New York Fee Mortgage Provisions from a Ground Lease
Brand: US Legal Forms
Rating: 4.64 (213 reviews)

Category:

Landlord Tenant - Commercial Leases

State:

Multi-State

County:

Bronx

Control #:

US-OL20071

Format:

Instant download

Description

This office lease form states that the lessor represents to the lessee that the existing fee mortgage is the only mortgage encumbering the land and the demised premises. The lessor agrees to cause the holder of the existing fee mortgage to agree to certain provisions.

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FAQ

With a land lease agreement (also known as a ground lease), you purchase the home but rent the land. One of the main advantages is the lower price of this unique arrangement. One of the main disadvantages is that you will not be able to build valuable equity in the land on which you live.

A leasehold mortgage is possible when a lien is placed on the tenant's interest with the lease, and it is used as collateral for the loan the individual obtained. This means that monies were sought for one reason or another, and it placed a lien on the property lease with a financial institution.

Whether you are a borrower or a lender, if you are considering a loan supported by a ground lease, you need to be sure the ground lease is "financeable." A financeable ground lease includes either (a) "subordination" of the landlord's fee interest in the land or (b) provisions to protect the lender (as leasehold

The lease must be sufficiently long to allow the lessee to amortize the cost of the improvements it makes. In other words, the lessee must make enough profits during the lease to pay for the lease and the improvements. Furthermore, the lessee must make a reasonable return on its investment after paying all costs.

The tenant under a ground lease can usually mortgage its leasehold interest in the land pursuant to an express right contained in the ground lease. The ground lease will, however, almost always require notice to the landlord and, in some cases, specific provisions which are required to be included in the mortgage.

The benefits of a ground lease Ground leases allow landlords to retain control over their land while simultaneously receiving a steady income. If executed properly, they can be a win-win scenario for both parties. Land leasing also allows for flexibility and specialized financing mechanisms.

Disadvantages: Leased land homeownership runs a risk of instability. Leases need to be renewed on a monthly or yearly basis.The rate for land-leases can be expected to rise over time.It's difficult to build and maintain equity with a home on leased land.

At a minimum, lenders will usually require that the term of the lease extend at least 10 years beyond the final maturity date of the loan. In order for a ground lease to be financeable, a lender will require that its mortgage be superior to any mortgages encumbering the fee title to the property.

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D. UNSUBORDINATED GROUND LEASES AND LENDER PROTECTION PROVISIONS . Search for jobs hiring in your area using ZipRecruiter's job search engine - the best way to find a job.Those who are paid on commission in the origination of a mortgage, determine which appraiser(s) to use. Think of every clever feature you want in a kitchen you'll find it here! Search homes for sale, new construction homes, apartments, and houses for rent. See property values. Zillow makes it simple to find a lender for a cashout refinance. United States. Congress.

Bronx New York Fee Mortgage Provisions from a Ground Lease

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How to fill out Bronx New York Fee Mortgage Provisions From A Ground Lease?

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FAQ

What are the advantages and disadvantages of a land lease?

What is the collateral on a leasehold mortgage?

What makes a lease financeable?

Do you amortize a ground lease?

Can you mortgage a leasehold interest?

What is the biggest advantage of a ground lease?

What are the pros and cons of a ground lease?

What are the disadvantages of a land lease?

What makes a ground lease financeable?

Interesting Questions

What is a Bronx Fee Mortgage Provision?

Who is responsible for obtaining the mortgage in a Bronx Fee Mortgage Provision?

Can the lessee use the mortgage funds for any purpose?

How does the Bronx Fee Mortgage Provision affect the lessor?

What happens if the lessee defaults on the mortgage?

Can the lessee assign or transfer the mortgage to someone else?

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