Good to Know - Warrantable Condos

Reblogger Joseph Domino 480-390-6011
Real Estate Agent with HomeSmart SA541769000

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 

Original content by Debe Maxwell, CRS 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

 

     

Charlotte Real Estate Team - The Maxwell House Group

 

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Charlotte CRS Agent


Debe Maxwell, Realtor®/Broker/CRS

RE/MAX Executive

CharlotteBroker@icloud.com
Direct:  (704) 491-3310

 

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Rainmaker
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Peter Mohylsky, SoWal Is HOME.
PrimeSouth Properties - Santa Rosa Beach, FL
Let me help you find your path to the beach.

There are additonal requirements depending on the mrket area.  Condotel comes to mind. here in Fl.

Jun 23, 2019 10:26 AM #1
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Michelle Carr Crowe,Altas Just Call...408-252-8900!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

So true. Sometimes there are issues that mean only certain lenders can finance some condos.

Jun 23, 2019 03:17 PM #2
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