Condo Conversion Loans

Conversion financing sits in an awkward gap. It isn't a rehab loan, it isn't a construction loan, and it isn't permanent debt. There's entitlement risk, absorption risk, and a legal process most underwriters have never read.

I've packaged these across Somerville, Cambridge, Medford, and the North Shore. I know which municipalities slow you down and which lenders don't flinch when they see a master deed in the exit plan.

• Two- and three-family conversions to individually deeded units
• Small building conversions, 4–12 units
• Sponsors buying with conversion as the value-creation thesis
• Anyone who's been told "we don't do those"

• Financing through master deed recording and unit registration
• Release-price structures so you recapture equity as units sell, not at final payoff
• Absorption schedules a lender will actually underwrite
• City conversion ordinance compliance
• MGL Chapter 183A requirements built into the timeline from day one

Municipal process risk. Some cities have tenant notification requirements, right-of-first-refusal periods, and conversion restrictions that add months. If your loan term didn't account for that, you're negotiating an extension under pressure.

Absorption assumptions. You're modeling all units sold in five months. The lender wants nine. That difference is your interest carry — budget for their number.

Unit value versus building value. The whole point of conversion is that the sum of the units beats the building. Your appraisal has to demonstrate that with real unit comps, not a math exercise.