Can a USDA Loan Finance a Condo?

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Mortgage and Lending with Metroplex Mortgage Services NMLS ID# 185288

Financing a Condo with a USDA Loan

Can a USDA loan finance a condo? This is a common question from both homebuyers and Realtors who are unsure if it’s possible to finance through the USDA loan program. A USDA home loan offers flexibility and may be an option when trying to finance a condominium.

Please remember that USDA loans will only finance primary residences and not second homes or investment properties.

 

 

USDA Requirements for Condominiums

Condominium requirements per Administrative Notice 4699:

  • Condominiums are deemed acceptable to RD (Rural Development) when the project has been approved by Fannie Mae (FNMA), Freddie Mac (FHLMC), HUD, or VA
  • Lenders must retain evidence in their permanent loan file of the project’s approval by one of these four entities
  • Applicant’s remain responsible to obtain individual homeowners insurance as applicable

Additional underwriting may be applicable depending on your lender. Red flags to look out for could be:

  • % of investor occupancy in the project
  • Date the project was completed and when it was turned over to the homeowner
  • Review and analysis of applicable budgets and insurance coverage for the project
  • Please note that just because there are association fees, does NOT mean it is always a condo

Be cautious, condominiums are a form of ownership and not tied to a specific building type.  If you have any questions please consult with your Realtor or county property appraiser to determine if the home is actually a condo or other type of classification.

Qualifying for a USDA Home loan can be overwhelming, but when paired with a lender that specializes and understands the USDA loan process, it is a match that can open the door to home ownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months click here for your USDA Blueprint for Success!

For more immediate scenarios- click here to apply online for a USDA mortgage today!

If you already have an existing pre-qualification in process or experiencing financing issues on an existing transaction, please take advantage of our free 2nd opinion service to double check where you stand.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Email: SeanS@mplx.org
Toll Free: (800) 806 – 9836 Ext. 280

We are known for returning calls, replying to your emails, and responding to voice mails.

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