Metropica gets Fannie Mae approval

Metropica gets Fannie Mae approval 

65-acre development will include eight condo towers with 1,900 units 

Joseph Kavana and a rendering of Metropica 

Metropica, a master-planned community in Sunrise, is the latest South Florida condominium to receive conditional Fannie Mae approval, as developers try to lure domestic buyers. 

Once Metropica receives final approval, buyers will be able to purchase qualifying residences with as little as a 5 percent down payment on primary residences, 10 percent for second homes and 20 percent for investors, the developers said. 

Lender New Penn Financial assisted Metropica through the process of obtaining Fannie Mae approval, and serves as the development’s preferred mortgage lender, Jeffrey Brown, manager of the Developer Services Division for New Penn Financial told The Real Deal. The loan program, backed by the federal government, is only available to domestic buyers. 

Metropica Holdings LLC, a venture led by real estate developer Joseph Kavana, CEO of KGH International Development, LLC, is developing Metropica. The $1 billion project will span 65 acres in southwest Broward, and will include eight residential towers with 1,900 units, 400,000 square feet of retail, 650,000 square feet of office space, and landscaped parks, the latter of which will be designed by EDSA. When completed, the community will include a health and wellness center, a resort-style beach club and elevated recreational amenities such as tennis courts and mini soccer fields. Chad Oppenheim is the lead designer.

In November, Kavana closed on $38 million in construction financing for Metropica. 

So far, construction is underway at the first residential tower, Yoo at Metropica, which broke ground in October. The 28-story condominium with 263 units and 10 penthouses is now 50 percent sold, the developers said. 

As foreign economies falter, developers are increasingly turning to the domestic market for buyers and are seeking Fannie Mae approval as an incentive. 

Canvas, a condominium tower planned to rise in Miami’s Arts & Entertainment District, last month received conditional project approval from Fannie Mae, which agreed to purchase or securitize mortgages on individual units in the 513-unit property being developed NR Investments. Brown said Penn Financial helped secure the approval. 

In January 2015, the developers of the Crimson in Miami’s Edgewater neighborhood also received Fannie Mae approval, in anticipation of a drop in foreign buyers looking to buy Miami condos. 

- See more at: http://therealdeal.com/miami/2016/01/25/metropica-gets-fannie-mae-approval/#sthash.v0eC7uq8.dpuf#sthash.O5dIDZJ5.dpuf 

U.S. Will Unmask Secret Buyers of Luxury Real Estate

Beginning in March of this year, the Treasury Department will take steps to increase transparency in luxury real estate transactions. The new initiative will target all-cash real estate purchases made by shell companies, LLCs, partnerships, and other entities that conceal the homebuyer’s identity. The use of shell companies in real estate purchases is legal, and this will be the first time that high-end buyers—often private by nature and necessity—will be required to reveal their identities. While an individual might utilize a shell company or LLC to protect their privacy and protect themselves from liability, the Treasury and the FBI are aiming to crack down on the international buyers who use these transactions to hide illicit funds and illegal activity.

Money Laundering & Luxury Real Estate

In “Towers of Secrecy,” a series of investigative articles published in 2015, The New York Times pulled back the curtain on all-cash, multi-million-dollar real estate purchases made by mysterious shell companies in Manhattan. This investigation revealed that many of these real estate transactions were being used to shield the significant wealth of foreign politicians and business people who had been accused of or tied to criminal activity. The Times reported: “Many of the owners represent a cross-section of American wealth: chief executives and celebrities, doctors and lawyers, technology entrepreneurs and Wall Street traders. But The Times also found a growing proportion of wealthy foreigners, at least 16 of whom have been the subject of government inquiries around the world, either personally or as heads of companies. The cases range from housing and environmental violations to financial fraud.” This investigation revealed that, of all the homes worth $5 million or more in the United States, nearly half are purchased using shell companies. It also suggested that, in many instances, luxury real estate professionals do not know the true identities of their clients.

Unmasking Secret Buyers

Partly in response to The Times’ findings, the U.S. Treasury is launching their initiative to unmask mysterious buyers of high-end homes. The initiative will start in Manhattan and Miami-Dade County, running from March through August, and apply only to all-cash purchases made through shell companies. When a shell company pays cash for a Manhattan property worth at least $3 million or a Miami property with at least $1 million, the title insurance company will be required to identify the “natural persons” behind the transactions—“each individual who, directly or indirectly, owns 25 percent or more of the equity interests” of the entity that purchased the property. The title insurance company will then copy the license or passport of each individual and report their findings to the Treasury. The government will compile this information in a database for federal law enforcement, who will investigate the buyers and the origins of their cash.

If many sales involve suspicious money, the Treasury will instate permanent reporting requirements across the entire country. The Treasury also noted that, as part of a broader push to crack down on money laundering in real estate, future investigations would focus on the professionals who assist in these suspicious transactions, such as lawyers, bankers, and real estate agents.

Posted on February 22, 2016 at 11:30 AM in In the News, Luxury Lifestyles, Luxury Trends.

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