Developers spin numbers in new buildings

In Jonathan
Miller’s podcast today, he said he is starting to see more creative
ways of presenting a new development as a success. For Fannie Mae to
guarantee a loan in a new development, the new pre-sale requirement is 70 percent of units. Instead of saying how many apartments of the
total units have sold, some developers want appraisers to say how many
of the offered units are sold. Miller said if a building has 100 units,
but is only offering 20 and 8 have sold, lenders will be told that 40
percent of offered units have sold, rather than 8 percent of the total
units.