[Lender]

I’m from a strata lender, so naturally I’m going to say it’s a good thing.  But basically the point of a strata loan is to stretch out the payments into quarterly levies, rather than a special levy.  Using your example of $1.2m for 20 lots, a special levy is $60,000.  A 10 year loan at 9% (you should be able to get cheaper than the rates you quoted), means a quarterly loan levy per unit of $2,280.

Another point is that some builders won’t commit unless the OC has the funds already (i.e. the special levy has been collected), or there is an approval letter from a strata lender.

Hopefully that’s helpful.

[Lender]

There is a lot of commentary around about the hybrid loan – often by people who have “heard” of it, but not actually examined the documentation or who are qualified to opine on its enforceability.  The lenders who offer the hybrid have, not surprisingly, sought legal advice on the enforceability from strata lawyers, so it’s a relatively simple matter to ask them how they get comfortable.  Then one can make an informed decision.

[Author]

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