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Condo Loan

Condos are an appealing choice for those seeking property with lower maintenance needs and access to attractive amenities. The mortgage process and lending requirements for condos differ slightly from those for traditional single-family homes. At Florida Home Loans, we understand these nuances and are here to assist you every step of the way.

What is a Condo?

A condo, also known as a condominium, is a privately owned residential unit within a larger building or complex. In the case of Florida Home Loans, a condo can be seen as a desirable private residence that offers individuals the opportunity to own their own space within a shared building. Along with the personal living unit, condo buildings often provide shared amenities such as garages, recreational rooms, gyms, and outdoor spaces. This arrangement allows residents to enjoy both the privacy of their own home and the benefits of communal facilities.

What are Condo Fees?

Condo owners are responsible for paying condo fees, also known as common charges, which cover the expenses associated with maintaining the common areas in the complex. These fees are mandated by the Homeowners Association (HOA) and are due on a monthly basis.

What is the Difference Between a Warrantable and a Non-Warrantable Condo?

Warrantable condos align with the guidelines established by Fannie Mae and Freddie Mac, making them easier to finance. On the other hand, non-warrantable condos do not conform to these standard lending criteria, presenting more difficulties in securing financing.

The mortgage lender will review the condominium complex to determine its warrantable or non-warrantable status which will determine the loan programs you are eligible for.

Condo Building Requirements

When determining whether a condo is warrantable or non-warrantable, lenders review several key factors, including:

  • Owner Occupancy Rate: The percentage of units occupied by owners versus renters.
  • Single Entity Ownership: Whether a single entity owns more units than typically allowed (usually more than 10% in smaller complexes or 20% in larger ones).
  • Litigation: Whether the condo association is involved in any legal proceedings that could affect the financial stability of the complex.
  • Budget and Reserves: The health of the condo association’s budget and reserves for maintenance and emergency repairs.
  • Insurance: The adequacy and comprehensiveness of the condo association’s insurance coverage.
  • Commercial Space: The percentage of the complex devoted to commercial versus residential use.
  • Delinquency Rates: The percentage of condo owners who are delinquent on their association dues.
  • Project Completion: Whether the condo development is completed or if there are phases that are unfinished.

These factors help lenders assess the risk associated with financing a condo purchase, guiding them in determining if a condo meets the criteria for warrantability.

Contact us to learn more or get started today!

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Why Choose Us?

With our extensive 20 plus years of experience in mortgage financing, we excel in delivering both conventional and non-conventional financing options tailored to suit our customers’ needs. Collaborating with a wide range of investors and lenders, we proudly offer a diverse range of loan programs. Our utmost aim is to provide borrowers with the most optimal financing solutions available.

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