Crum Creek Valley Condos
Condominium financing poses some unique challenges including stricter lender requirements and higher costs than typical residential purchases.
Both the buyer and the condominium must qualify in the eyes of the lender to obtain a mortgage approval for a condo purchase.
A lender is looking for a condominium that has healthy finances, high owner occupancy rates, and a low percentage of association fee delinquency rates.
Lenders follow guidelines from the Federal Housing Administration, Fannie Mae and Freddie Mac for condo mortgages.
Some of Fannie Mae’s requirements for condominium financing are:
– More than half of the condo units must be owner-occupied.
– No owner may own more than 10% of the units.
– No more than 15% of owners can be delinquent on condo dues.
– All amenities must be completed if the development is more than 12 months old.
– Buyers who make a down payment of less than 25% will generally pay an additional 0.75% of the loan amount at the closing or a higher interest rate of about 0.25%.
Lenders will also take a close look at any pending litigation involving the condo association that might threaten it’s financial well being.
It is difficult for borrowers with a small amount of money available for a down payment to obtain financing since the majority of condos in our are not approved by the Federal Housing Administration (FHA) and thus not eligible for low down payment loans. Check for a condo’s FHA approval status.
Condos that are not approved for FHA or Fannie Mae financing are known as “nonwarrantable” and offer few options for buyers or refinancers.
Even if the condo meets the Fannie Mae guidelines, buyers may find that they must make a down payment of 20% or more because mortgage insurance companies are less willing to provide mortgage insurance on condo loans, since they are considered riskier.
Wallingford PA Real Estate – Wallingford, PA 19086
