BankUnited of Florida recently posted on their website a list of 191 condo projects that are “non-permissible”, meaning they will not issue any mortgages on these properties, even to buyers with good credit. They say they are doing this because sales have been slow, buyers are backing out of contracts and no one really knows the value of the units. And if they don’t know the value, they can’t set loan-to-value ratios with any certainty.
Taking this a step further, this means that anyone who has purchased a unit at one of the projects will have an even harder time trying to sell it because financing won’t be available, at least from BankUnited. And if they see is as risky or uncertain, other banks are sure to follow. For developers, it will be difficult if not impossible to sell the inventory they currently have.
The list includes condo projects in some of Miami’s most prestigious locations, such as Biscayne and Brickell Blvds.