Fractional Financing

My group has begun shopping for fractional financing. Things are improving since these loans came on the market several months ago, but the rates are still surprisingly high - at least a point above the average condo mortgage. Yesterday one broker quoted me 8%! This for a 100% owner occupied building that has been a TIC for nearly seven years, with all owners holding credit scores far above 700.

This evening my partner pointed out the publicized fractional loan rates for the new 18-unit Francisco Palms TIC. They are offering individual loans of up to 75% of the purchase price at a rate of 6.95%, fixed for the first five years, with interest only or amortized options. These are the kind of rates we would like to see for all San Francisco TICs. But unfortunately only the TICS that involve developers with construction loans from the Bank of Marin are getting this kind of deal.