Different Strokes for Different Folks: Condo Loan Rules Can Vary By Lender

Condominium lending is getting tougher, not because of a new guideline from Fannie Mae, but because each lender may impose its own more restrictive rules that are a layer on top of the Fannie Mae condo rules.
 
For example, last week I spoke with a loan officer at a mega-bank turned who had to turn away a buyer two months into a purchase of a local condo because this particular lender has a rule that no more than 30 percent of the condo complex units could be rentals. 
 
The Fannie Mae rule for established complexes is 50 percent maximum for non-owner occupied.
 
I thought the lender must have made a mistake in applying a Fannie Mae rule that is applicable to new condo complexes, which currently has a 30 percent non-owner occupied threshold.  But it turns out that in declining markets - including Kitsap County - the big bank's limit is 30 percent on even established complexes.
 
BOTTOM LINE
There is a huge advantage in working with Golf Savings Bank on a condo loan these days as we are Fannie Mae Direct, meaning if the loan meets Fannie Mae guidelines, we can get it done.