Lenders willing to offer loan at around 33% in contract

Hi Brownstoners,

Our offer was accepted on a new condo. We are now trying to find a loan that will work for us. Currently, the building is only about 20% in contract. We were told that most banks will require a minimum of 50-70% in contract for a conventional loan.

There is one loan option that would allow us to close once the building is 33% sold, but it is at a higher interest rate of 5.25%. (As compared to about 4.8 for a conventional loan.)
To make matters worse, the loan amount would have to be under $417k so we’d have to put down over 30% as a down payment. (Ouch.)

Does anyone know of a lender who would:
1) Allow you to close at around 33% in contract? (We just don’t want to have to wait 5 months to go to closing.)
2) Offer a reasonable/competitive rate

On FHA loans. We were told that in order to get an FHA loan, you pay 1% of the purchase price up front, and then pay a $300 fee per month – which we could not afford. We have a reasonable down payment and don’t want to have to pay these fees. The seller did not offer enough concessions to make up for the difference in these fees.

I spoke with “Investors Savings Bank” who is offering .25% off the interest rate if we open an account and set up our paychecks to be “direct deposited” into the account. The trick with this, is that if I change jobs and no longer have direct deposit, our interest rate would go back up .25%.

We also will not consider an ARM loan. We’ve had one family member too many lose their home because the once the interest rate changed, they could no longer afford it.

Thanks for your help, as always!