Robby Toledano, a first-time buyer, thought he was close to purchasing a one-bedroom condominium in Forest Park. He reached an agreement with the seller and all the steps were in line to close the deal.
Then it was brought to his attention that the 60-unit building at 211 Elgin was not certified by the U.S. Department of Veteran Affairs.
Toledano, a gunnery sergeant and veteran of the U.S. Marine Corps, is entitled to VA loan benefits, which allows him to buy property with no money down. The government, in turn, vouches $30,000 on his behalf, should he default or cannot pay the bills. The benefit is awarded to military members who serve at least four years. Toledano has served 14.
“It is telling the bank, hey, we are backing this guy for 30 grand no matter what happens,” said Toledano, 38. “The government is going to pay in case you run away to Mexico or default or whatever. It puts me in a better position than a civilian to a bank.”
To receive the benefit, though, the building must get VA approved. Toledano said his loan processor, Ron Graf of Prospect Mortgage, offered to try and get the property approved so Toledano could move forward with the purchase. In order to get certified, the VA needs paperwork filled out, including documents regarding budgets, association fees and bylaws.
“It’s not that difficult,” Graf said. “It’s just a little bit lengthy because you are dealing with the government, so it may take three or four weeks for approval.”
Based on a response from the property management company, Toledano said he was under the impression at first that the process for VA certification was in the works. But later he said the company became uncooperative and stopped returning phone calls.
“We were just asking for documents, and it became such a messy situation,” Graf said. “It became a real struggle.”
Eventually the condo association voted against becoming VA certified because the board decided it was too risky as a business decision.
On the one hand, Toledano was frustrated that they didn’t just tell him “no” right from the beginning so he could look elsewhere. But he is also offended that the building assumed he was “some kind of threat to stability.”
“You are afraid that if you let me in, it’s going to open a floodgate that will let anyone in who needs government help?” he asked. “Don’t tell me that anyone with federal benefits is considered dangerous to your tenants.”
Graf, too, was surprised by the board’s vote because he predicts the property value will only drop as the unit sits vacant.
“Do you want a veteran in there or do you want empty units?” Graf said. “His credit qualifies, his income qualifies, he is a prime borrower – they don’t even have any knowledge of that.”
VA approval “is not something out of the norm,” he added. “We were not asking them to jump through hoops and spit nickels. It is just standard procedure.” (There are currently 17 condominium buildings in Forest Park that are VA approved and 33 in Oak Park.)
Neil Wren, the president of the White House Condominium Association, said the decision was nothing personal against Toledano. He didn’t know anything about the man, not even his name.
“It’s not a matter of denying anybody their God-given right,” he said. “It’s simply not a good business decision. If he has a means to seek alternate financing then that’s what he should do. But we are not going to chance anything here and take on additional risk in this economy, no matter who you are.”
The condo association did not want to take the risk in case the new owner could not afford the property and the bills that come along with it. With a VA loan, he said, the owner has no equity in the property and the association is not allowed to put a lien on the property should something happen.
“We want the ability to put a lien should the owner become delinquent with the property – and therein lies the business decision,” Wren said.
Wren said he understands Toledano’s frustration. He, too, is a veteran from the Vietnam War. In fact, three men of the five-member board (including Wren) are veterans.
“There is no veteran card, race card, gender card or sexual orientation card. This is just not a good business decision,” he said. “Condo associations are really hurting in this area. I don’t think you will find very many sympathetic ears here in Forest Park.”
Meanwhile the seller of the unit, Ann Kennedy, said she, too, is frustrated to have to find another buyer. She inherited the property through an estate, and it has been on the market since the end of August. She was going to sell it to Toledano for $89,400.
“I would prefer to get the unit sold and move on,” she said. “They choose not to do that, which is their right. I just need to wait and see if I get any other buyers.”
Toledano, on the other hand, is looking for a new condo in Forest Park. An Oak Park native, he has been living in Forest Park the past four years. After a one-year tour in Iraq from 2004 to 2005, he came back to the Chicago area where he is still currently serving on recruiting duty for the Marines.
The property management company did not immediately return phone calls for this story.