Did you know that even the best buyer with perfect credit and debt to income ratio can still get turned down for a mortgage? How is that even possible? This can happen if a condo is considered non warrantable. Simply put, a non warrantable condo does not meet the guidelines of Freddie Mae and Fannie Mac.
During the mortgage crisis back in 2008/2009 Fannie Mae and Freddie Mac ended up with several condo properties surrounded by vacant areas. For example, a qualified buyer would finance a condo but after the housing bubble burst, future developments of the complex came to a halt. Or in other cases, owners would walk away form their properties resulting in a ghost town of empty units.
As a result, Fannie Mae and Freddie Mac put together a questionnaire for condo developments to make sure they are warrantable.
What are some of the requirements for condos to be warrantable?
- No single entity can own more than 10% of the units
- At least 51% of the units are occupied
- Less than 15% of the units are behind on their association dues
- The homeowners association (HOA) is not named in any lawsuits
- Commercial space accounts for 25 percent or less of the total complex
So what can a buyer do if they fall in love with a non warrantable condo? Do they have to give up and find another property?
The good news is, there are lenders who will finance non warrantable condo loans. At Superior National Bank we provide opportunities to buyers by offering non-warrantable condo loans, often referred to as portfolio loans.
Basic Requirements for Non-Warrantable Condo Loans
- Loan amounts up to $484,350.00 (Higher loan amounts may be available – call for details.)
- Loan-to-value (LTV) ratios up to 90%
- Fixed-term Adjustable Rate Mortgages: 3/1, 5/1, 7/1 and 10/1 ARMs
- Purchase & Rate/Term Refinances
- Attached & Detached, Primary Residences (1 to 4-units) & Second Homes (1-unit)
- Minimum credit score of 660, maximum debt-to-income ratio of 43%
Learn More: Portfolio Loans for Non Warrantable Condos
Get Approved for a Non Warrantable Condo Loan
Have you been told you’re stuck because your condo does not meet the guidelines of Fannie Mae and Freddie Mac? Julie Krumholz from Superior National Bank can help!
Julie has over 30 years in the mortgage industry with various loan products, including on warrantable condo loans. Her comprehensive background allows her to advise clients with unusual expertise.
