We all know condo financing has gotten ridiculously hard. Few are FHA Approved, taking out the FHA mortgage option for someone buying a Condo. So that leaves us with the Conventional loan route. But many lenders and mortgages require an owner occupancy of 70%+. The owner occupancy rate is the % of people who own and live in their condo vs those who rent out their condo. So what do you do if the condo is “non warrantable” and does not meet the owner occupancy rate needed to get approved for a mortgage……..
The Answer is the Condo “Limited Review”. Here is how it works:
1. The client qualifies for it when getting a Fannie Mae Automated Approval. Which should be done when a lender is pre-approving the client. If you know they are buying a condo be sure to ask if the lender ran their Fannie Mae Approval and did it qualify for a Limited Review
2. In my experience the most clients who qualify for the Limited Review have excellent credit and are putting down 20% as their down payment. And the condo will be their primary home.
3. By having a Limited Review the lender will not ask what the owner occupancy rate is for the condominium project.
If you are helping a client buy a condo or have a condo listed for sale, you want to know about the Limited Review!!