WARRANTABLE CONDOS

When a condo is identified as warrantable, that means it meets Fannie Mae’s and Freddie Mac’s conventional guidelines and Fannie Mae and Freddie Mac will buy the loan. Typically, a condo is considered warrantable if, for instance:

• No single entity owns more than 10% of the units in a project, including the developer
• Fewer than 15% of the units are in arrears with their association dues
• There is no litigation in which the homeowner’s association (HOA) is named
• Commercial space accounts for 25 percent or less of the total building square footage
• Both FHA and VA require that at least 51% of the properties must be owner occupied.  And FHA requires that if it’s new condo project, that at least 70% of the units have been sold.  Here is the official website of the HUD approved condo list.  Just type in your Condo name and if your condo project is listed then it’s eligible for FHA or VA financing.

NON-WARRANTABLE CONDOS

A non-warrantable condo is a condominium property in which the loan is not eligible to be sold to Freddie Mac or Fannie Mae, and as such, mortgage financing for this type of property is considered by most banks to be more “risky.” Freddie Mac and Fannie Mae would consider a condo to be “non-warrantable” if, for instance, the condo:

• Is in a development which has yet to be completed
• Is in a development which allows for short-term rentals
• Is in a development where one person or entity owns more than 10% of all units
• Is in a development involved in litigation of any kind regardless of whether the building is suing another party, or is the party being sued.
• Some of the common property types which fall into the non-warrantable category include condo hotels (condotels), timeshares, fractional ownership properties, and other projects which require owners to join an organization, such as a golf club.

LOANS for Non-Warrantable Condos

We have helped many home buyers and investors purchase, refinance and cash out on non-warrantable condos even when other conventional lenders turned them away.  From Condotels, Condo Hotels, Vacation Condos, Investment Condos, we’ve seen and done it all.  Our streamlined process and our long-time relationships with lenders allow for us to offer the same competitive rates as we do for our conventional loans without requiring that the condo meet the same qualifications for Fannie Mae or Freddie Mac warrantable condos.

You do not have to be a perfect borrower either!  Non-Qm loans do not mean the loan is more difficult or that you have to provide extensive financial documents or that you must have perfect credit.  Non-Qm works just like a conventional and in many cases is EASIER to qualify for and faster to close.

Buying a nonwarrantable condo can be a very smart financial investment and we strive to make sure you understand all of your options available to you for your condo purchase.  Investment Condos can be great for Airbnb, short-term, long-term rentals or vacation rentals.  Don’t wait to start earning income and gaining value with your condo investment.  Contact us now to get started.