Florida First, Certainly California, Next Nevada,and Absolutely Arizona

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Lenders don’t love us no’ mo’. Want a vacation crib in Miami? How about an investment property in Orlando? Show up with 40%, no seller carry-backs allowed, thankyouverymuch.

This e-mail came in this morning from IndyMac Bank :

Florida Guideline Restrictions

Transactions securing properties located in the state of Florida are subject to the following restrictions/limitations:

For all Loan Programs:

• All loans are restricted to Full Documentation




• Primary Residence transactions:


– The maximum LTV and CLTV otherwise available for the transaction type must be reduced by 5%.
– The Borrower’s current primary residence must be sold and closed prior to,
or concurrently with Indymac’s funding.
– If the to-be-secured property is a single family residence, condominium or planned unit development, it must be located within an established project. An established project is one in which 90% of the total project units have been sold, and the subject property has been previously occupied / owned by someone other than the developer.

• Second Home and Investment Property transactions are limited to a maximum 60% LTV / CLTV.

Remember I said, back on April 1, 2007 that IndyMac was conservative? Every other lender followed suit. Today it’s Florida; the other three states will be next. This is why my outlook for housing in 2008 is bleak.

Do not despair, though. While this will virtually halt activity it will “right-price” (that’s my new phrase) the market…QUICKLY. Expect Florida prices to drop like a ball off a table, in February, when the rest of the lenders pucker.

…and then there will be buyers. Oh, there will be buyers.

PS: If I sound giddy it’s because the “muddy waters keep getting clearer” and I can see the bottom.