Life As We Know It

Downtown St Louis saw an investment of 4.4 billion dollars in reinvestment between 1999 and 2008.  During most of that time, the acronym "FHA" used in conjunction with home loans was mostly unheard of (see My Day at the FHA part 1 and Part 2).  Having been developed during that time, there was no percieved need for loft buildings to be "FHA Approved" at that time.

FHA insured home loans have always treated condominiums different than single family homes, having an complicated approval process.  Once approved, FHA loans could be done on a building with "limited review," meaning that the underwriting was simplified and minimal information from the association was required to complete the loan. IN THE PAST, if a condo buildning wasn't approved, but was acceptable, it could go through the SPOT APPROVAL process, by which most loans downtown were done.

In life, the only guarantee is change.

In a past life, watching the ripple effects of government decisions trickle down often meant watching how the affected businesses would respond to the governments mandates.  When the FHA changed thier guildelines, it seemed as if they were trying to make things easier overall.  After all, why should EVERYONE wanting to buy a condo in an acceptable building have to go through a "spot approval" process over and over instead of just doing a bit more work and approving the whole building?  Their goal was to simplify the approval process, stating that any Direct Endorsement lender could do the approval.  What we're hearing is that these same Direct Endorsement lenders are passing the buck to condominium associations. 

In 2008, when I visited the FHA offices, I asked why a condo association or realtor couldn't just arrange for the approval.   My question seemed to be confusing.  "Why can't the lender just do it?" was the confused response.  Of course, knowing lenders, I couldn't think of too many lenders that wanted to go through the public service of having a whole buildng approved just to do one loan. 

The attached picture file shows the requirments needed and most of the buildings downtown should do EVERYTHING THEY CAN to try to comply with these requirements to get thier building FHA APPROVED!  

Looking at the requirements I have some questions.  More will be revealed when I get the answers. 

The basic fact that seemingly alludes condo associations is that the more difficult a condominium is to purchase, the longer it can take to sell and the stronger the buyer's chances of getting a better deal. 

While some buildings will have more buyers looking for FHA loans than others, it would benefit ALL buildings and downtown as a whole if condominium associations act now to get FHA approval for the next two years.

The True Lofts

The history of lofts is fascinating. Not a SOHO History expert, past reading talks of the starving artist--unable to afford residential apartments--rents out "space" in the largely abandonded structures zoned and equipped for commercial use. So began the attraction of the loft. A subversive element. A Soho Lofts website had this to say about the original lofts, "Most of these spaces were also used illegally as living space, being neither zoned nor equipped for residential use, but this was ignored for a long period because the occupants were using space that would probably have been dormant or abandoned..."

The beauty of these spaces involves personality.

In the mid 60's and into the 70's, getting a loft space in soho took on the personality of the occupant. The challenge was to make the space "yours" without having to add traditional building of walls and halls. Creativity and unconventional style was born and nurtured. The concept in various forms has spread and evolved.

Most of today's lofts from St. Louis loft builders don't have as much in common with the spaces in Soho. Here, the developer is the main source of creativity. Modern elements are produced in mass. Most loft dwellers today don't have the time for the creative lifestyle. The mostly open large spaces are being carved up into classy apartments with more conventional 2 and 3 bedroom units. The loft concept has evolved into the mainstream here and in many other towns.

Enter the King Bee Building. Located at 1709 Washington, the building resembles a converted commercial structure because that's what it is. Spaces rented out as office or artist studios were subdivided and sold as condos. The building and the lofts within are the closest thing to the Real Thing that downtown has to offer.

This weeks RFT highlighted a long brewing controversy within the building in its typical melodramatic and one sided approach. The article seemed to paint the "King Bee 9" as blameless victims. They may be. What seemed evident was the details conveniently left out of the story.

One thing that has been evident is that not everyone should live downtown. High density living favors people that can "play nice in the sandbox" with the patience and sincerity to work towards resolution. Various disputes in condo associations everywhere repeatedly confirm this fact.

Good luck to all at the King Bee for a amicable end to the story.