non-warrantable condo??

I am currently in the market to buy a condo and came across a property I like. In talking to the real estate agent, she explained to me that this is a non-warrantable condo because the owner occupancy vs renter is below the 50% FHA requires. In talking to some people, they said the owner occupancy requirement of 50% or greater (The FHA requirement that is making this condo non warrantable) does not apply to owner occupied condos. It only applies to properties that are rentals (not owner occupied) being brought as rentals not primary residents which somewhat makes sense. In a nutshell, I'm looking for financing on this condo and was hoping someone can provide me some options. I have great credit (around 800) but at this point, I only have the ability to put down about 5%-10% on a 210K loan. by curtis_454_878 from Morris Plains, New Jersey. Apr 10th 2013 Reply

Brian Kimball (briankimball_summitfunding)
#816 ranked lender in California - 13 contributions

You may also be able to move to a conventional loan as well, but it really depends on the project details. Many lenders have conventional loan programs with as little as 3% down, so if the property is not FHA approved, but does meet FHA guidelines and the approval has not been completed, you could possibly go with a Fannie Mae loan. If the project is not FNMA approved, then your lender can do a CPM which would be their own certification that it meets Fannie Mae guidelines. Fannie Mae requires that 51% of the units must be owner occupied or second homes. If there are more than 49% investment properties, you will have an issue with both FNMA & FHA loan programs, unfortunately. The other consideration on conventional financing is that if there is more than 51% owner occupied or second homes, but you are putting less than 20% down, you may have an issue with mortgage insurance guidelines, as they differ from Fannie Mae guidelines.I hope this helps!

Apr 10th 2013

William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions

You will not be able to use FHA financing if the condominium is not on FHA's approved condo list.. that's the first thing.. the 2nd thing is that if occupancy for owner occupied and 2nd home combined are less than 51% than it wont be allowed either.. there are many other factors that go into condo financing that there could be other factors that would disallow this complex.. no one really knows until the condo questioner is filled out and analyzed. However, to be honest, you should not be looking at this complex if it has all these deficiencies.. the very reason why the lender will not finance on this property should be the same reason you should not consider buying it.. the lenders understand what aids in property value appreciation and depreciation.. If this property has a high rental or vacancy ratio, that's a sign that the values of these units have been declining.. so my advise is to go find another property in a more stable environment.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Apr 10th 2013

Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

Go Conventional but I would call the HOA and see what the report the Occupancy as and make the determination yourself.

Apr 10th 2013

Michelle Curtis Loan Originator NMLS 401173 (MichelleCurtisLO)
#77 ranked lender in Florida - 2,245 contributions

We do non warrantable Loans call us! Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation. Ask for Michelle or Benny We will find the Best Mortgage Option to suit your needs!You can check us out at www.BestMortgageOption.com We are also proud Homes for Heroes affiliates

Apr 10th 2013