I am a local mortgage loan officer in Brookline MA, NMLS 380664. I would like to share some thoughts on the discussion about owner occupancy ratios. It is true that Mortgage Insurance Companies will require 70% owner occupancy for established condo projects; however they will accept 51% for new construction. This is a detail that often gets overlooked. http://www.mgic.com is a great resource for mortgage insurance questions. If a buyer has the 20% down to avoid mortgage insurance and intends to live in the unit aka owner occupied, Fannie Mae does not require any occupancy ratio. If it is an investment purchase for that buyer, then there must be a 51% owner occupancy. However, please note that some First Time Homebuyer Programs like Mass Housing which follow conventional aka Fannie Mae guidelines actually have a 70% occupancy requirement that mirrors the MI companies. There may be other issues with a condo that make it ineligble for Fannie Mae aka Secondary Market Financing options. As others have stated, a portfolio loan may be a great option if the buyer does not have the large downpayment; however I would always encourage buyers to review all their options before selecting the right loan for them.
Ellen G. Friedman, Keller Williams Realty, firstname.lastname@example.org or 617-448-1542
The % down can be relative to the strength of the buyer also.
Cash buyers are not affected, of course.
Is there an investor (person or entity) in the building that owns 10% or more of the units??
If you can do not try to sell, numbers may change in a few years.
That said, there are plenty of buyers out their who can do conventional financing but just know that depending on the bank buyers putting <%20 still might have problems with the financing.
Your point about no owner occupancy requirements for Fannie Mae if the place in owner occupied does not sound right however your point about conforming mortgage insurance sounds familiar. Confirm both with a lender.
Best option: Before listing your home go to a local brookline bank and talk to a loan officer about your building and the low occupancy. They may finance a buyer. That way when you list your home you can specifically state in your property description/listing sheet, with X requirements X bank will finance the loan.
It is good that you are aware of an issue as it will help you choose the right agent and prepare the condo to market, when you are ready for it. Remember, a first impression is very important and those who attend to it do better than those who don't.