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Can a charity get a BTL mortgage


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I've got a crazy idea to set up a property investment charity and wondered if such a thing exists (or can exist).

Bascially set up a charity to invest in property and then give the proceeds (rental profit & refinance to withdraw capital growth) away to good causes and invite others to get involved by donating cash that we invest for a bigger return for good causes.

Can a charity get BTL mortgages in the same way a company can? And would they be able to remortgage back up to 75% when the house value goes up?

Interested in any advice in this area.

thanks,

 

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On 2/13/2022 at 9:09 AM, Derekandlewis said:

I've got a crazy idea to set up a property investment charity and wondered if such a thing exists (or can exist).

Bascially set up a charity to invest in property and then give the proceeds (rental profit & refinance to withdraw capital growth) away to good causes and invite others to get involved by donating cash that we invest for a bigger return for good causes.

Can a charity get BTL mortgages in the same way a company can? And would they be able to remortgage back up to 75% when the house value goes up?

Interested in any advice in this area.

thanks,

 

Generally, mortgage lenders only lend to ltd co's that specialise in BTL investments (i.e. SPVs)

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It sounds like you are looking to set up a housing association. I think finance is the least of your worries as the regulation woud be immense!

Assuming you could get registered as a charity, you would be looking at purely commercial finance, i echo @astonthemortgageguy, i dont know a single BTL lender who would entertain this.

That said i dont see any reason why you couldnt donate proceeds as a business to charity, the regulatory part comes in when you start holding other peoples money in order to buy property. You can imagine the potential for fraud, and i suspect the reason it doesent exist is because the costs of administering a charity and the amount of capital you need to meet regulatory requirements renders it uneconomical.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker & BTL Specialist

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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As the guys above have covered, typical BTL funders will not have appetite for this kind of lending, therefore a charity cannot approach these lenders and apply for standard products in the same way an individual or SPV company can.

There are some specialist lenders who are very much active in the charity space, so being a charity borrower does not exclude you from being considered for lending. 

As ever with more unusual transactions the devil is in the detail and support from these lenders would depend on the overall nature of the transaction and what your objectives are. 

Commercial Finance Broker ¦ Property investor ¦ Ex banker/underwriter with over 20 years lending experience

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex/Portfolio BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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