Financing in 19127>Question Details

Lorri Paster, Real Estate Pro in Blue Bell, PA

Can't Get Financing....HELP!

Asked by Lorri Paster, Blue Bell, PA Wed Jun 29, 2011

Hi all....I have a client who put in a full price offer on a short sale condo....sounds like a no brainer, right? Well, the problem is we cannot find a lender to finance the home due to the fact that the owner occupancy ratio is less than 50%. Do we have any options other than to look for another home??

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Eric Axelson’s answer
Lorri, I have had good luck with these people. The first finances the Lumberyard Condominiums in Collingswood, NJ. Tell him Eric Axelson, formerly of Main Street Realty referred you to him. The second is simply my savior! He has saved many a deal. His company has access to hard money, so is not always tied to the same rules and regs as a public bank.

Roland Minard, Trident Mortgage
http://rolandminard.tridentmortgage.com

Dave Simhony (856) 906-6881
Web Reference: http://www.FamousEric.com
0 votes Thank Flag Link Thu Jun 30, 2011
Lorri
Try St. Edmunds Bank or Prudential Savings. I believe they both portfolio and if you have a downpayment of 20% or more you may be in luck.
Ed Fallon, MBA NMLS#144708
Gateway Funding
610-308-9001
0 votes Thank Flag Link Thu Jun 30, 2011
Hello Lorri,

you can get financing with 25% down with programs for unwaarrantable condos. Some local portfolio lenders may go up to 80%.


Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
0 votes Thank Flag Link Thu Jun 30, 2011
You do have other options provided the seller is open to doing something creative.
0 votes Thank Flag Link Wed Jun 29, 2011
Lorri.

Unfortunately condos suffer indiscriminately too many cookie cutter lender rules.

You are referring to rules surrounding 'Conventional' Fannie-Mae' financing. Fannie-Mae insured loans are eventually packaged with others and sold on Wall Street as securities

Each condo should be looked at for its unique merits. Owner occupancy is only part of the picture.

I feel confident that you will have a better opportunity to get the purchase funded if your client can put down a minimum of 20% down and use a local Bank 'portfolio' lender. This type of loan will require a slightly higher interest rate than a plain vanilla Fannie-Mae insured loan. The loan from a local portfolio lender is held within the lenders Bank. Moreover, local portfolio lenders offer greater flexibility in their condo review process.

Good luck.

Charles Balducci 215.531.2000
charlesbalducci@me.com

Coldwell Banker Preferred (Avenue Arts)
0 votes Thank Flag Link Wed Jun 29, 2011
Hi Lorri, I feel your pain. Hopefully you'll find a lender that can help you. Best of luck!
Web Reference: http://www.ajsocalteam.com
0 votes Thank Flag Link Wed Jun 29, 2011
Is it owned occupied or a second home? If so, then there are a couple choices, both of which we can do as long as it meets a longer list of eligibility requirements (or the 2nd choice is a shorter list). I discussed with one of my underwriters earlier this month on it. The version is called a "Full Lender Review", and when it is done, the following guideline applies:

At least 51 percent of the total units in the project are occupied as a primary residence or second
home if the subject unit is to be used as an investment property. The owner occupancy pre-sale
requirement may be waived if property is a primary residence or second home.

It's done when the loan is submitted to underwriting (appraisal required), and the other documents that are required would be:

Conventional Condominium HOA Questionnaire
Conventional Condominium/PUD Warranty form
Master insurance policy dec page
Current Budget
Engineer’s report for conversions created in the past 3 years
Management Contract
Agreement of Sale

The other is if in Fannie Mae's DU (Desktop Underwriter), we get a "Limited Review" findings (a comment that says it's eligible for a Limited Review), and in that situation the owner occupancy requirement isn't required - 90% LTV maximum for primary residence & 75% LTV maximum for 2nd homes (investment properties are ineligible).

https://www.efanniemae.com/sf/guides/ssg/sg/pdf/sel063010.pdf - page 566 describes the "Limited Review".

We lend in Pennsylvania (all 50 states), I've personally done financing for a few purchases in the Philly area as well. Let me know if you'd like help.
0 votes Thank Flag Link Wed Jun 29, 2011
Lorri, Condos are a pain to finance these days and the owner occupancy is right near the top of issues lenders want to avoid. The other is having one investor own over 10% of the units. Perhaps another mortgage consultant could pull it off but I certainly cannot. Best of luck to you and your client.
0 votes Thank Flag Link Wed Jun 29, 2011
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