This is important information for anyone interested in buying a condo, Buyer's Agents need to be aware before they show the condo and have the buyer fall in love with something they cannot finance, Thanks Debe Maxwell, CRS
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
- 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
Direct: (704) 491-3310
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