Condo Financing - Can you get it?

10.22.2011  |  category: Real_Estate  |  posted by: Joy Mengeringhausen

Obtaining condo financing is not easy but not entirely impossible. Lenders are stricter today than ever and an application for condo finanicing must also include the condo project being approved in addition to the borrowers approval. The condo project will fall under a considerable amount of scrutiny to be approved. The level of scrutiny depends on the amount of down payment.

condo

When submitting an application for condo financing, the application must include the following:

Condo documents with budget and Q & A.The developments management company must complete a one to three page questionnaire.

 

With 20% down payment:

The lender needs to be certain the budget is adequately funded. Reserves must be a minimum of ten percent of the annual budget. Why? This has to do with insurance deductibles, if there is a catastrophe the lender needs to be certain the development will be able to pay the insurance decuctable.

There are less than fifteen percent delinquencies. There cannot be more than fifteen percent of units with outstanding condo fees to the association.

There must be no more than forty percent rentals in the entire development. The IRS considers condos that are occupied two weeks out of the year as a secondary home, not a rental property. While the percentage of total units that are rented might be over forty percent, the number of units that are rented annually may fall below the forty percent mark.

 

With 30% down payment:

There must be no more than forty percent rentals in the entire development. The IRS considers condos that are occupied two weeks out of the year as a secondary home, not a rental property. While the percentage of total units that are rented might be over forty percent, the number of units that are rented annually may fall below the forty percent mark.

ApprovedAs with any Real Estate purchase, it is essential to be pre-approved before making an offer to purchase with finanincg.  In today's market it's more important than ever as most sellers will not even consider an offer for purchase without a pre-approval letter.


Recieve your pre-approval letter, click here (coming soon).

 

 

 


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