Good to Know - Warrantable Condos

By
Real Estate Agent with www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 228209

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.


Pieces of the mortgage puzzle

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 less of the total building square footage

  • The homeowners association (HOA) is not named in any lawsuits.

 

Condo homeowners are often placed on a wait-list within their complex HOA until the required maximum tennant-occupied units falls to support adding their unit. This is done to maintain Fannie Mae & Freddie Mac's required maximum owner-occupied status in order for the complex to remain warrantable. There is often quite a wait but, that wait helps insure that your complex IS warrantable - maintaing or improving upon the value for which you purchased the property in the first place.

 

Need help exploring Charlotte area condos? We're here to help! Call or text (704) 609-2381 today!

 

© Debe Maxwell | The Maxwell House Group | RE/MAX Executive | CharlotteBroker@icloud.com | Good to Know - Warrantable Condos

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Joseph Domino 480-390-6011 06/23/2019 09:41 AM
Topic:
Home Buying
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Charlotte North Carolina Area
Buyer Information - What Buyers Need to Know in Today's Market
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Rainmaker
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Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Debe Maxwell, CRS Yes, selling condos is often not as easy as it sounds. I cannot tell you how many times I have had buyers show me the great condo they found on Zillow, only to have me tell them sorry you cannot get your financing for this complex. Always check with your leader.

Jun 23, 2019 09:37 AM #1
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

In our area, it's often not easy to sell non-conforming condos - everyone doesn't have cash! It's best to know up-front what you're getting your buyers into on the other end, for sure!

Happy Monday, Joseph Domino 480-390-6011

Jun 24, 2019 05:03 AM #2
Anonymous
Lizette Conover

Great article, Debe! Thanks!

Jun 24, 2019 05:17 AM #3
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Well, thank you so much, @Lizette Conover!

Happy Monday!

Jun 24, 2019 10:18 AM #4
Rainmaker
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Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417
United Real Estate - Addison, TX
Real Service. Real Results. Real Estate

It certainly helps if the condo is on the FHA approved condo list. Non-warrantable condos are a tough sell.

Jun 25, 2019 07:04 AM #5
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