{"id":7272,"date":"2018-07-17T08:33:20","date_gmt":"2018-07-17T12:33:20","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=7272"},"modified":"2021-01-17T18:32:03","modified_gmt":"2021-01-17T18:32:03","slug":"buying-a-condo","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/buying-a-condo\/","title":{"rendered":"Buying a Condo Just Got a Lot Easier"},"content":{"rendered":"

If you are buying a condo with a mortgage, you find out pretty quickly about the condo approval process.\u00a0 Typically, condos go through either a full or limited review.\u00a0 Of course, limited is easier which we will explain further in this article.\u00a0 Going through the full condo review process results in\u00a0more denials\u00a0because of high rental concentration or other factors.\u00a0 Most condominium complexes are primarily made up of second home<\/a> and investment condos.\u00a0 Investment condos are otherwise known as rental condos.\u00a0 So, by nature many of these condo purchases require the full review.\u00a0 Fortunately, the condo approval process just became easier!\u00a0 Let’s explain the levels of condo review first so you know the reasoning and why this is good news. \"buying<\/p>\r\n

Full Condo Review Vs Limited Condo Review<\/h2>\r\n

First of all, if a condo is already approved with Fannie Mae, FHA, or VA<\/a>, then the process gets much easier.\u00a0 But, the condo review process comes in when it is\u00a0not already\u00a0approved.\u00a0 So, what is the big deal with condos getting approved?\u00a0 Actually, lenders and agencies have enough statistics to know that certain characteristics cause a higher chance of foreclosure<\/a> and\/or property value decrease.\u00a0 Thus, the higher risk means more chance of a full condo approval process. The problem with full reviews when buying a condo is there are potential issues that come up on the lender condo questionnaires.\u00a0 Examples include not enough reserves in the annual budget, too many units with past due HOA dues, too many rentals, and just taking too long to provide necessary documentation for a closing. Limited reviews are fast and don’t get into reviewing so much information.\u00a0 Although, just because a loan program doesn’t require this information doesn’t mean a buyer shouldn’t dig further.\u00a0 Buyers are\u00a0investing into a\u00a0partnership with an association and should make sure that it is a healthy entity.\u00a0 Who would want to partner in an association where it doesn’t have funds for repairs or improvements?\u00a0 What if a large percentage of owners are past due?\u00a0 That means an increase of dues for the remaining owners.\u00a0 Foreclosures could hurt values and there is so much more. This doesn’t mean to skip on buying a condo, but it does mean working with your Realtor<\/a> to verify it makes sense for you.\u00a0 Like many condo buyers, there is the desire to own a condo but also get rental income to offset costs or maybe even make a profit.<\/p>\r\n

Buying an Investment Condo Just Got Easier!<\/h2>\r\n

Up until recently, all investment condo purchases required a full condo review.\u00a0 As mentioned above, that means more documentation that may deny the condo.\u00a0 At least it meant a longer process.\u00a0 But, now buying a rental condo with 25% down qualifies for a limited review with a Fannie Mae conventional loan!\u00a0 This may not seem like much until you actually decide to buy a condo.\u00a0 But, Realtors and mortgage lenders dealing with this every day realize how big this is!\u00a0 Basically, this review includes verifying appropriate insurances in place and nothing huge wrong with the complex.\u00a0 Of course, it must still be appraised as well.\u00a0 Quite a big deal for the condo market.\u00a0 Although, currently we are not able to offer this in Florida.<\/p>\r\n

Realtors, Sell Condos Easier Now!<\/h2>\r\n

The term “non warrantable condos” gets thrown around a lot and typically the reason is for higher than 50% rental concentration.\u00a0 A complex with a higher number of rentals would cause issues with a conventional loan full condo review.\u00a0 But, when the investor concentration isn’t reviewed, all of sudden more condos get approved.<\/p>\r\n

Condos Eligible for Limited Review:<\/h4>\r\n
    \r\n
  1. Primary residence 10% down or more<\/li>\r\n
  2. Second home 25% down or more<\/li>\r\n
  3. Investment condo 25% down or more<\/li>\r\n<\/ol>\r\n

    Besides helping Realtors, this helps condo sellers, condo buyers, condo values, condo associations, mortgage lenders, and more.<\/p>\r\n

    Other Helpful Articles\u00a0for Buying a Condo<\/h2>\r\n

    Condos are a popular topic because they offer low maintenance living and often in coastal or other fun areas.\u00a0 Luckily, we have other very helpful condo articles that explain options available for condo buyers and sellers.\u00a0 Check them out and give us a call:<\/p>\r\n