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A quick Condo guide for buyer financing!

I have been doing open houses for a new Condo complex here in Bellingham Washington called"Telegraph Ridge".

I wanted to quickly answer some questions that frequently come up regarding financing of new condo projects. I am not a lender or in the banking industry, but as a real estate agent, I feel I should have some basic answers for potential customers who are looking to buy.

When you are talking financing for "New Condos" as opposed to resale condos, your lender will probably ask you what exactly you are trying to finance.

For conventional financing, each lender must approve each condo project they lend in.

There are two types, "New" or "Existing".

New condos are where the homeowners have not taken over control of the association, the project is still under construction (phases), there are more than 10% of the units still for sale (any of the above criteria makes it new ((at least in Whatcom County Washington )).

Existing condos:

1. Full project approval requires obtaining:

A. Current budget B. Association Declarations C. Articles of Incorporation D. Bylaws E. Evidence of Insurance F. Use for Investment must have 51% owner Occupancy.

There are many factors in getting financing on condos, but this is just a quick guideline for buyers to follow when they do decide to make the exciting leap into home ownership!

Patrick Johnson, ABR E -pro

Windermere RE

360-220-0281

Posted by Patrick Johnson on 01/21/2009 02:48 PM

Comments (4)

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4 Comments on A quick Condo guide for buyer financing!

JAN

Hi Patrick this is a helprful explanation for people wondering about new condo financing. btw thanks for stopping by earlier it's great meeting some local pros here on the rain. One of my best long time friends (whom i consider family) is up your way. They've been living near Bellingham and are in the process of moving to Blaine as we speak i believe. I'll look for your Open House at "Telegraph Ridge" if I get up that way to see their new place before you have them all sold. Happy Selling!

JAN

Hi Patick,Your new condos can be funded as long as the facilities are 50% completed and the units themselves are 50% completed. Owner occupation percentages are the bugaboo! Most lenders abide by the Fannie Mae guidelines of 51% minimum but many wll get jumpy if you have over 25% investor units due to the very real impacts of rental tenancies on the community. Since condos are essentially condensed living it can be very disruptive to have very high unsupervised student populations who like to play loud music all hours. Offenders can literally devalue a condominium buidling in the lender's eyes. These days I've heard of lenders sending out appraisers to check out the night life before funding a condo...(no kidding). Of course, the right borrower always has a better chance of getting a loan these days. Ask your lender to be real about that so you don't waste your time