Showing a history of a steady income improves your chances of being approved for the HomePath mortgage. The actual building that contains the condominium unit you want to buy must pass certain criteria in order for you to obtain a Fannie Mae or Federal Housing Administration FHA loan. Fannie Mae lists all approved projects within the United States on their website.
New Rules: Warrantable & Non-Warrantable Condo Mortgage Loans
These most recent rules were put into place to lessen the risk of investing in a condominium mortgage. If 15 percent of homeowners in a condominium are late in paying their monthly dues for 30 days or more, the complex can be ruled ineligible for financing. This softening of payments indicates a shortage of funds from mortgage holders and is usually the first indication that a unit might be going into foreclosure.
Lack of paying owners also affects the condo association's ability to make repairs and maintain the grounds, which results in an unkempt appearance for the building that depreciates the value of all the units. Fannie Mae must see the accounts of the community in order for a prospective buyer to qualify for a loan. Fannie Mae requires that 50 percent of the units be occupied by owners, not investors. This gives stability to the community and assures other owners that their community won't be renter-dominated. It's incumbent on each community association to monitor who's purchasing units and what the intention is for occupying them.
Fannie Mae looks at the list of owners to rule out that no more than 10 percent of the units belong to investors.
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Fractured Condo Financing
Nadeen December 5, at pm - Reply. Larry Norris January 21, at am - Reply. Maurice March 1, at am - Reply. Ilyce Glink March 3, at pm - Reply. Maurice, these are excellent suggestions. Thanks for putting in your two cents!
Fannie Mae Approved Condos
Ilyce Glink, Publisher ThinkGlink. Is there such a thing as a fully funded reserve so no additional funding is necessary?
Ilyce Glink March 6, at pm - Reply. Hope this helps. Thanks for your comment. Marcia Martin April 22, at am - Reply. Where can I find documentation that shows that a Homeowners Association can be fully-funded? Do you know of any sources that a lender can refer to? Ilyce Glink April 22, at pm - Reply. Thanks for the question. Mida Marevac May 26, at am - Reply. Gord Sorli August 14, at pm - Reply.
What companies do reserve fund studies for condo in Ontario? Ilyce Glink August 14, at pm - Reply. Condos are included, but only if the property gets the stamp of approval from the VA. The USDA guaranteed loan program allows eligible buyers in qualified rural areas to purchase a home or condo with no down payment.
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Aside from that, a condo must be:. Freddie Mac and Fannie Mae loans have conforming limits that cap the amount you can borrow.
Fannie Mae ineligible Condos
A jumbo loan is a loan that exceeds the conforming loan limits for Fannie Mae and Freddie Mac. You can use a jumbo loan to get a condo mortgage. Requirements would be the same as for conventional loans.
With an FHA loan, for example, the minimum credit score for a loan is The better your credit score, the better your interest rate is likely to be for condo loans. A condo presents a riskier loan to a lender compared with a traditional house.
To compensate for that added risk, some lenders may charge higher rates for a condo loan. The size of a down payment for a condo also will depend on the loan.
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