MIAMI-The developer of the 292-unit luxury condominium in downtown Miami known as the Marquis Residences is  trying to sell the remaining 227 units at the development in a unique way by offering to fund mortgages for so-called non-conforming loans. The 67-story tower, the tallest residential building in Miami as well as Florida, is largely regarded as luxurious and comes with a host of amenities, such as a five-star boutique hotel in the building, which boasts a spa and fitness center which owners can use, and panoramic views of Biscayne Bay and Miami Beach.

But even those attributes are not always enough to close the deal at a time when there are still too many condominiums around, albeit much fewer than a year ago, because of bulk condominium sales. One prominent exception to the deflation in condominium prices in Miami is the recent sale of the 7,800-square-foot penthouse unit at the Marquis, which sold for $4.2 million, which the developers say is the most expensive condominium ever sold in Downtown Miami's Biscayne corridor.  

The aforementioned penthouse sale notwithstanding, Marquis developer New York-based Africa-Israel USA has reduced its prices by as much as 40% (units start at $375,000), which in today’s market is just a starting point, but that is not all.  Africa-Israel, in partnership with Americor Mortgage, based in Birmingham, Michigan a suburb of Detroit, has dedicated $50 million to fund buyer mortgages.

Many of the Marquis’ buyers, if not most, are foreign, so they do not quality for Fannie Mae or Freddie Mac loans, because they do not have green cards, says Bob Waun, CEO of Americor. In addition, there are condominium investors and buyers of so-called jumbo mortgages, those over $417,000 in Miami, who also do not quality for Fannie Mae and Freddie Mac loans. These buyers are Americor’s target market.

“We closed our first loans at the Marquis last October,” says Waun. Americor is a correspondent lender in the state of Florida, which has been in business since 1986, he says. “Our specialty is new condominium projects, condo-hotels and resort properties,” says Waun, who adds that while the mortgages are originated by Americor, post-closing they have a hybrid structure. “They are close to being seller-financing, but not quite,” he says. “Although we make the loan,  Africa-Israel stands behind each transaction, which means that some of the money is theirs,” says Waun, declining to more specific.

Ironically though, “Almost no one to whom we’ve given a mortgage needs one,” says Waun. “Some foreign buyers think they have to pay cash,” although when given a choice, they opt for a mortgage, he says. Americor mortgages only go up to 50% loan-to-value, much less than conventional financing.

“Although there were some pre-sales which closed in October,” units at the Marquis were not available to the general public until April, says Lori Ordover, managing director for Africa-Israel USA. Since last fall, the Marquis sold 65 units, but most of those were sold between mid-March and mid-June, she says.

“We started marketing units a few months ago,” says Ordover. “Before that, we didn’t have a certificate of occupancy.” As for pre-construction buyers, who bought units starting in 2005 and 2006, before the building was up, she says that only 20% of them actually closed, because of the financial crisis.

Because so many of Marquis’ buyers are foreign, “We worried about the euro taking a dive recently, but we still do have a lot of international buyers,” says Ordover. That’s partly because prices are still very low by historical standards, she says.