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Good to Know - Warrantable Condos
Good to Know - Warrantable Condos With condos (as well as the few co-ops that we have in the Charlotte area), it’s not just a buyers’ creditworthiness the lender is examining. The fiscal and physical health of the entire complex into which you’re buying must also be vetted. “Warrantable” is a term used by Fannie Mae and Freddie Mac to describe condo projects and properties against which they will allow a mortgage. Condo projects and properties not meeting those Fannie Mae and Freddie Mac warrantability standards are known as “non-warrantable.” In general, a condo or co-op unit is considered non-warrantable if the project has yet to be completed, its developer has not turned over control of the HOA to the owners, the community allows short-term rentals, a single person or entity owns more than 10% of all unit, or it’s in a project where the majority of units are rented to non-owners.
Typically, a condo is considered warrantable (conforming) if: No single entity owns more than 10% of the units in a project, including the developer At least 51% of the units are owner-occupied Fewer than 15% of the units are in arrears with their association dues Commercial space accounts for 25% or ... more
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