Financing a condominium is quite different than financing a single-family home. The condo’s Homeowners Association must meet certain criteria to be approved for financing using standard Conventional, FHA, VA and USDA home loan financing. If the HOA’s project does not meet these criteria, the property is considered a “non-warrantable” condo. Meaning… You cannot obtain standard “typical” financing that is available for “warrantable condo’s.
Early investigation into the viability of a condo project meeting the standard loan programs is critical when deciding on a home in a particular condo project. Most lenders have access to the HUD, VA and AHFC websites to search for approved projects, but often forget to check until their buyer is already under contract. You can save yourself a lot of time and heartache by using the FHA Condo Search; VA Condo Search ; AHFC Condo Search links. If you are seeking conventional financing, then your lender or agent will need to send the HOA project manager a “condo questionnaire” to complete to determine if it is eligible for conventional financing.
What do you do when you have found the perfect condo, at the perfect price and it is found to be a non-warrantable condo? Financing can still be obtained for these units; however, you will be asked to make a higher down payment, most definitely will pay a higher interest rate, and most investors require a borrower to have a credit score of 680 or higher. But, considering you just purchased a condo at below market price compared to other similar projects, the difference in your monthly payment may be minimal.
When you are considering purchasing a condo as your next home, talk to the experts. Guaranty Mortgage Service., Inc. has the knowledge, experience and loan programs to finance both warrantable and non-warrantable condo’s. We can guide you through the process, and verify prior to purchase whether the condo’s you are looking at meet standard financing guidelines, or whether you would need to proceed with a non-warrantable loan program.
Jackie Toppin, President of Guaranty Mortgage Service, Inc.
4300 B Street, Suite 301., Anchorage, AK 99503.
Jackie has been in the mortgage industry for over 35 years and has extensive experience in financing condominiums.
