What are the rules to know when showing a buyer a condo in terms of financing?

Asked by Roy Lhanie, encino, CA Fri Jan 27, 2012

Someone told me that if the condo is 50 percent or more rental occupied then the loan wont fund?

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Robert Chome…, , San Diego, CA
Mon Jan 30, 2012
Sometimes you can get a conventional loan where the automated underwriting system DU gives you a "limited review" response. In these cases occupancy % is not checked at all and no condo cert is needed. This is for a good credit borrower with usually 20% down. Otherwise you will need a FHA or VA approval. Or full condo cert conventional
1 vote
George Raymo…, Mortgage Broker Or Lender, Fort Worth, TX
Mon Feb 6, 2012
I am asked all the time what is the best way to finance a Condo. Without question is the FNMA Homepath Program. It doesn't matter what the delinquency or occupancy factors are, low 3% down for owner occupied buyers and 10% for investors. No appraisal necessary fast and easy close. If the Condo is not a FNMA, I have a investor who specializes in Non or Unwarrantable Condos, but you're looking at 20% down for sure. As an Agent, look for the FNMAs, they usually offer to pay the buyer's closing cost and offer selling bonus.

Best of Luck!
0 votes
, ,
Mon Jan 30, 2012
The condo needs to be approved by either FHA, FNMA or Freddie depending on where the customer is getting their financing. Go online and look up the association to be sure. Getting agency approval can slow down or even kill your deal, make sure the seller will co-operate with you in writing, on your purchase contract make your offer contingent on agency approval.
0 votes
Molly Hay -…, Agent, Columbus, OH
Sat Jan 28, 2012
This is the biggest problem in my area! I had a short sale listing that I couldn't get anyone to finance!! We had to wait for a cash buyer. There are subprime lenders that will still finance them in my area but the borrower needs excellent credit and alot of money down.
0 votes
Gregorio Den…, , San Diego, CA
Sat Jan 28, 2012
See Fannie Mae Selling Guide Page 615
Then speak with an experienced MLO prior to making an offer.
Web Reference:  http://WeFixRates.Com
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Sat Jan 28, 2012
Consult with an experienced lender in your area. Mike Meena with Augusta Financial is very diverse in loans and is one of the best in the country. Everything depends on what type of loan your buyer is getting. You need and active list of condos in your neighborhood on whether they are FHA or VA approved if that is the loan type of your buyers. Some complexes you can not get any kind of loan because of the owner occupid ratio.

Good Luck!
Web Reference:  http://www.laura4homes.com
0 votes
Jolie Muss, , Upper West Side, New York, NY
Sat Jan 28, 2012
My understanding here in NYC is that for regular financing a condo has to be owner occupied and not for investment. Please consult some financing professionals in your area or here on Trulia in my Q& A Annette Levinson has answered questions about that previously.
0 votes
E. Lynn LeGl…, Agent, Los Angeles, CA
Fri Jan 27, 2012
Talk to the buyer's lender. Lenders know the answer.
0 votes
Mack McCoy, Agent, Seattle, WA
Fri Jan 27, 2012
If you are a Realtor®, you need to partner with a colleague who has condo experience; it is a violation of the Realtor® Code of Ethics to practice outside of one's area of expertise.

If you are not a Realtor®, then you need to have this explained to you by your favorite lender. Or at least your client's lender.

All the best,
0 votes
Alain Picard, Agent, Puyallup, WA
Fri Jan 27, 2012
From what I've heard from the people at the bank that I deal with they won't be able to go FHA if more than 50 percent isn't owner occupied and also the HOA dues have to be up to date for a certain percentage of the condos in the development. I have this written down in my office but I don't have it in front of me so I'm just going off of what I remember.
0 votes
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