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Condo Mortgage Lenders

Warrantable and Non Warrantable Condos 

If you are searching for a condo you will want o know the difference between a warrantable condo and non warrantable condo because the difference will determine the down payment requirement.  The condo you choose will be known as either a Warrantable Condo or a Non Warrantable condo. The term “Warrantable Condo” means a condominium complex that meets the minimum Fannie Mae  or Freddie Mac condo requirements. Furthermore, condominium mortgage applicants seek out a  condominium because of  convenience but convenience comes with challenges when it comes to qualifying for a condo mortgage.

Condo Mortgage Lenders Programs

  • 100 % VA Condo Mortgage Lenders Down to a 580 fico!
  •  96.5% LTV on FHA Approved Owner Occupied Condos Lenders=  3.5% Down payment!
  • 95% LTV on Owner Occupied Condo Mortgage Lenders=  5% Down payment!
  • 90% LTV on Second Home Condo Mortgage Lenders= 10% Down payment!
  • 80% LTV on Second Home Condos Mortgage Lenders= 20% Down payment
  • 80% LTV on Investment Condo Mortgage= 20% Down payment.
  • 75-80% LTV on Non Warrantable Condo Mortgage Lenders + Condotels.
  • FHA Condo Mortgage Lenders Down to 580 Fico with 3.5% Down.
  • VA Condo Mortgage Lenders Down to 580!
  • Fannie Mae Approved Condo Mortgage Lenders
  • Freddie Mac Approved Condo Mortgage Lenders

Non Warrantable Condo Mortgage Lenders

  • Up to 80% LTV
  • At least 30% of complex owner occupied
  • Condo litigation considered
  • Structural issues must be resolved and litigation is to recoup funds
  • Commercial influence exceeding FNMA limits considered             
  • What is a Non-Warrantable Condo? A Non Warrantable condo means the condo complex in question does not meet the minimum risk exposure standards of of FHA, VA, or Fannie Mae.

Warrantable Condominium Factors 

   • Most of the Condo units are owner-occupied or second homes.
    • No More than 15% or less of the condo units are more than 30 days delinquent on HOA dues.
    • No more than 10% of a Condo project can be owned by a single person or entity.
    • No more than 20% of the Condo project can consist of non-residential space.
    • On established and existing Florida Condo projects, at least 90% of the condo must be sold.
    • For new and currently converted construction, 70% of the units must be pre-sold
    • Florida HOA’s must have at least 10% of its budgeted income designated for reserves
    • Adequate insurance coverage for liability, fidelity, and a master policy for building
    • HOA budget review

How Do I know If My Condo is Warrantable Condominium 

Step 1- Try these 3 warrantable condo links!

Step 2- Get a  Condo Questionnaire Filled out. Or Ask the association if the condo complex in question is warrantable.

Does the Condominium qualify for Mortgage Financing?

When you purchase a  condominium, you have a shared interest in your property with the other residents. The homeowners’ association takes the  responsibility to safeguard that the  development can continue to operate as a useable  entity. Condo mortgage lenders have extensive questionnaire to ensure a condominium association has a strong financial footing. Usually condo mortgage lenders require at least 10% of their reserve funds before it will approve a mortgage in a condominium association. Many condominium associations disregard reserves because of lack of funding from unit owners which limits the number of  warrantable condominiums that are available on the market for financing. if a development doesn’t meet these lenders questionnaire requirements the condominium may  still possible to get a condo mortgage by going through what’s known as a “portfolio” lender. These are lenders that don’t sell their mortgages to

Fannie Mae, Freddie Mac and the FHA all have certain standards that condominium developments and their homeowners’ associations must meet before they will approve a mortgage to buy a unit there. Among the main requirements of all three is that at least half of the units must be owner-occupied and that no single investor can own more than 10 percent of the units (different rules apply for newly developed properties).

 Condo Down Payment Requirements

  • 3.5% Down on FHA Condo Mortgage Lenders. 
  • 5% Down Payment Condo Mortgage Lenders.
  • 10% Down on Second Condo Mortgage Lenders.
  • 25 % Down on an Condo Investment Property Condo Loan.

Ways To Find Out If The  Condo Qualifies For A Mortgage:

  • First, we see if the condo association complex is approved on the condo mortgage lenders list.
    • For Conventional Loans such as Freddie & Fannie, we check the Fannie Mae Approved Condo List.
    • For FHA Loans, we check the FHA Approved List.
    • For VA Loans, we check the VA Approved List.
  • If the condo project isn’t listed on the FHA list, we can do an FHA Spot Approval.
  • If the condo project isn’t listed on the VA list, VA allows us to close loans on all condo projects listed on the FHA list.
  • If the condo project isn’t listed on the Fannie Mae approved list, then we will do a Fannie Mae full review.
  • If the condo project doesn’t meet the full review requirements, then we will do a Fannie Mae limited review.
  • If the Condo Project doesn’t meet the full review requirements, then we can do a piggie back second mortgage to meet the limited review down payment requirements.

What is a Fannie Mae Condo Full Review?

The Fannie Mae full review requires that we review the condo associations budget and our condo questionnaire; it’s that simple. This process isn’t complicated, and we get this done within the first couple of days from the time you get an executed purchase contract.

Fannie Mae Full Review Condo Requirements

Below is a list of the most common items that can cause a Fannie Mae & Freddie Mac Full Condo Project Review to be denied.

  • The current year approved budget must show that 10% of the operating expenses are to be allocated to a reserve account.
  • A reserve study in lieu of 10% reserves allocated from the current year budget may be considered if prepared within the past 24 months by an independent 3rd party with expertise in Condominium Project Reserves.
  • No more than 15% of the unit owners may be more than 60 days delinquent on their monthly HOA dues or special assessments.
  • No one person or entity can own more than 20% of the total units.
    • Small 1-4 unit condo projects are eligible as long as no individual owns more than 1 unit.
    • 5-20 unit condo projects are eligible as long as no individual owns more than 2 units.
  • Commercial space can’t exceed 35% of the total project.
  • Litigation against the developer or contractor that is named as a party that relates to the safety, structural soundness, habitability is not allowed.
    • Pending litigation “litigation concerning localized damage to a unit in the project that does not impact the overall safety, structural soundness, habitability, or functional use of the project” is acceptable
    • Pending litigation when the amount of the claim is known is acceptable.
  • Investment properties ONLY, No more than 51% of the units can be investor-owned.

What is a Fannie Mae Limited Review for  Condo Lender?

A Fannie Mae limited review only requires that the project meet a few requirements listed below, Fannie Mae allows this because the down payment requirement is higher.

  • The developer has transferred control of the association to the individual unit owners.
  • The project must be 100% complete, with no additional phases to be built.
  • At least 75% of the total units are sold and closed.
  • Must not be a condotel or have condo-hotel type amenities such as a rental desk.
  • No one entity can own more than 75% of the units.
    • Small 1-4 unit condo projects are eligible as long as no individual owns more than 1 unit.
    • 5-20 unit condo projects are eligible as long as no individual owns more than 2 units.
  • Commercial space can’t exceed 35% of the total project.
  • Litigation against the developer or contractor that is named as a party that relates to the safety, structural soundness, habitability is not allowed.
    • Pending litigation “litigation concerning localized damage to a unit in the project that does not impact the overall safety, structural soundness, habitability, or functional use of the project” is acceptable
    • Pending litigation when the amount of the claim is known is acceptable.

A Limited review is much easier to get approved than a Fannie Mae Full Review approval because the condo complex questionnaire and condominium association budget isn’t required.

FHA Condo Lenders Spot Approval  Requirements

  • The project must have at least five units.
  • 10 or more units, up to 10% may be FHA-Insured.
  • Less than 10 units, up to two FHA-Insured units.
  • At least 50% owner-occupancy.
  • HOA Budget 10% reserve requirement (or amount supported by reserve study).
  • Maximum of 35% commercial space.
  • Maximum 10% individual ownership.
  • Manufactured homes, gut rehab, or new construction is not eligible.
  • No more than 15% of units are 60 days delinquent.

FHA-MORTGAGE-LENDERS.COM - DISCALIMER

US Mortgage Lenders has an extensive lender network that allows us to provide unique and mortgage solutions. Contact US for the most update information on terms and conditions. All Information on this site Is for example, hypothetical purposes and should NOT be relied on for decision making.
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