Sunday, December 4, 2016

FHA 203K Rehab Loans for Purchase or Refinance.

There are two types of 203K rehab loans, the standard and the streamline. FHA (Federal Housing Administration) is a division of HUD (Department of Housing and Urban Development. FHA administers the mortgage insurance for primary residential homes 1-4 units, that allows buyers the opportunity to purchase existing homes with 3.5% down payment. I will explain both types and some of the basics for both.

If you have been shopping for a home you’ve probably noticed many are in need a repair, remodel or a complete overhaul due to foreclosures and bank owned properties. This is a great example where a 203K standard can be used for a purchase. This rehab loan will cover a complete tear down to a complete rehab of all rooms, appliances, roof, electric, plumbing. If you are already a homeowner and would like to rehab or remodel your home, you can also refinance into a 203K standard.

If you are a Realtor this product could help you sell your listings! There are other loan products for seller but that’s another blog post. If interested email me for ways to sell your listings by offering your seller simple fixes that can make a huge difference in the seller net profits.

How a 203K Standard works; The seller or your lender depending on if you are buying or refinancing, your new loan is funded at closing. The 203K is a one time close loan. The funds needed for your rehab portion are deposited into an interest baring account at a bank or credit union and construction costs are paid out from this account just like a construction loan or at the completion of the project. With the 203K standard 5 draws are allowed. Inspections are required before each draw.
Loan maximums are like any FHA loan they are based on your county limits.
Click Here to find your state/county limits

The minimum on the rehab portion is $5000.00. IF your repairs or rehab were at or under $35,000 you would use the 203K Streamline or Limited.

Your FHA/HUD Consultant can make suggestions based on the scope of the project.
The lender will insist on a contingency reserve of between 10-20% to cover construction overages plus your payment of principal-interest-insurance-taxes (PITI) and mortgage insurance (MI) during the construction phase for up to 6 months if the property is uninhabitable. Your FHA/HUD Consultant will determine and make recommendations for the amount of the contingency and the duration of how long the property will be uninhabitable during construction.

Requirements;
You must have an approved FHA/HUD Consultant, that person reviews your plans, architectural drawings, material list and bids. The consultant will be required to complete two reports; A Feasibility Analysis Report (FAR) and a Specification of Repairs or SOR. The consultant will do an inspection before each draw to make sure all the work is done per HUD guidelines
Their fees range from $400 - $1000 depending on the size of the project.

You must have a Licensed General Contractor (GC) who oversees the complete project and works with the FHA Consultant to meet the FHA guidelines. Your GC will normally have subcontractors for electrical, plumbing, roofing all depending of the scope of the project. YOU can help on certain jobs but only under the direct supervision of your GC. The contractor must start the work within 30 days after your loan funds. The lender allows up to 5 months for contractor to finish the project and get the occupancy permit.

You must have an approved FHA Appraiser who will do an initial appraisal before funding of all the rehab plans, bids and cost breakdown and provide in the report the AFTER rehab completion Value. If this 203K is for the homeowner who is refinancing the appraiser will need to report on the “AS IS” value as well as the AFTER-completion value.

Here’s how a 203K Streamline or Limited works; This is a simpler process, you don’t need the FHA/HUD consultant although they are valuable and you might want one anyway! Just not required. This loan has a limit of $35,000 in rehab money available after close. Again the minimum is $5000. You still need a Contractor and Appraiser.
The contractor has 4 months to complete the work.
The type of repairs you can do range from remodeling kitchen/bathrooms to buying all new appliance. A new roof, electrical, plumbing and fixtures, even landscaping can be included. You just need to keep it at or under $35,000.

They are called streamline because the process is much easier and quicker.
However even the 203K standard may seem difficult it’s NOT, most of the work is done by others including your lender (ME) the Consultant, Contractor and Appraiser we all work together to make it all come together. It’s a GREAT way to get a home under market value and make it yours. I highly recommend these loans, they are both great products.

As for you the borrower, qualifying for either of these FHA 203K standard or streamline is basically same as any FHA loan, some lenders restriction may apply in addition to the FHA guidelines. Best way to see if you qualify is to contact me and I’ll get you pre-approved. 
It’s FAST,EASY and FREE! Go to my website to apply and let's get started Roxy's Website
Here’s a couple links to help you with some research, I always recommend doing your research and educating yourself and I am also happy to help with education and research.

Find a FHA/HUD consultant in your state… just add your state in the drop down and all the approved consultants in your state will be listed. After your lender(ME) I recommend talking with a consultant, they can help you with many questions and a referral to the best contractors, who are experience in working with FHA203K projects. They know who are the best in their field.


There are many other interesting factors for multi-family units and how you can use the 203K product. I didn’t get into these types of properties here, because this is a blog not a book. So, if you have questions contact me, roxy@roxyredenbaugh.com or just call me. I would love to talk with you. 

If you are an investor and thinking..... how can I do this too? 
Because who wouldn’t want to buy distressed properties to resell or keep and rent. FannieMae has a product for you too! It’s called the HomeStyle Loan, stay tuned and join my blog over on the right side and I’ll post information and guidelines on that product next.

Thank you for stopping by my blog, I appreciate and welcome your comments and questions.
Have a wonderful day! 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Thursday, November 24, 2016

Roxy's Real Estate News Blog: HOUSE FLIPPING ON THE RISE

Roxy's Real Estate News Blog: HOUSE FLIPPING ON THE RISE: Flipping is such a popular craze. Not sure about you but I am a regular on HDTV and I love Chip and Joanna Gains. This type of estate inve...

HOUSE FLIPPING ON THE RISE

Flipping is such a popular craze. Not sure about you but I am a regular on HDTV and I love Chip and Joanna Gains. This type of estate investing strategy is not for everyone but if you are thinking about diving into this flipping home strategy you are not alone. 

The flipping market has been busy with some 51,434-single family homes and condos flipped in the second quarter of 2016, this is a six-year high. With an average $60K profit, it’s no wonder this strategy is HOT!

I have some points of interest you might want to consider if you have considered house flipping.

Most flipper investors or at least about 71% are using all cash to fund their deals. Most are using funds from investors that invest in people who buy houses to flip and they partner with them for a predetermined percentage of the profits plus interest on their funds. That’s one way, another is with a short-term bridge loan, this could be for a large amount to cover several properties and as each home is sold they are removed as security from the original bridge loan. There are many ways to fund these projects. I see many lenders wanting to get involved providing new programs with the flipping industry in mind. So don't stress about the money, it's available.

The most important thing is YOU!
This endeavor is not for everyone. You need to invest in yourself and get yourself educated before you just dive in, because this can be very risking if you don’t know what you are doing. I am not saying you need to go spend thousands of dollars on one of those Gurus that’s been flipping houses successfully for years. But instead go out there and buy real estate investing books, join some forum groups and talk to like-minded people. BiggerPockets is one of the best I know of and is very useful for many real estate investors for education, networking and deal-
making and will prove to be a great resource.

Do research on this industry and learn as much as you can. Learn marketing for leads and find out where the best areas for distressed homes are located, research county records for vacant homes that the city or county has in their inventory. Talk to Realtors! DO YOUR RESEARCH. Hopefully you will then know when you will make your first move and get started.  BE careful, most newbies realize very quickly this is not easy money and is a lot of hard work.

I do know a few flippers, I have helped them on the money side, they do love it and are making money. They started with one house and now are working several.  I know you can too, just be smart, get educated, start small, but do get started if this is what you want to do. Procrastination is your worse enemy for any kind of success. Get in the right mindset to succeed in your house flipping dream and get busy!

I found a couple article to help you start your research … go ahead and check them out!
And as my 10-year-old grandson claims you can learn just about anything on YouTube! So, don’t forget YouTube as a research source because he is correct.

Please leave your comments and questions, they are appreciated and encouraged. 
Join my blog on the right directly from your FB account and you will see my blog post first. 
Thank you for stopping by, have a great day! 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Thursday, November 10, 2016

Thinking About Becoming an Investor of Multifamily-Housing Rental Property

NOW is an excellent time for becoming an investor of multifamily rental property. 
We are seeing a 6-year surge in apartment rentals. Why you say? Millennial renters, although we realized an increase in homeownership in 2016’s first two quarters we are seeing more and more households opting to rent instead of buying. There are many reason (see my last blog post) but overall this increasing market is looking more appealing to investor than ever before.

There are some HOT markets for buying multifamily units these are the top 5 in the nation.
  • Orlando, FL
  • Phoenix, AZ
  • Atlanta, GA
  • Fort Lauderdale, FL
  • Las Vegas, NV
If you are selling your multifamily units, you will do well if your property is in the Hottest selling market in the nation, these are the top 5 in the nation. 
  • New York City, NY
  • Pittsburg, PA
  • San Francisco, CA
  • Miami, FL
  • Nashville, TN
It is very important to do your due diligence and research the area and properties you are considering. Professional help from a Realtor can be useful but as an investor you don’t want to rely completely on anyone but yourself.

Location, Location, Location is always going to be the most important factor of any property you buy.

There are several tips about finding the best location.
  •        Finding the best property in the best neighborhood, or the worse property in the best neighborhood, because rehabbing a rundown property can make for a great investment if the location is in a well sought out area.
  •        Check with the Police or go to the library to see about the crime rate in the area before you buy. No one wants to rent in a high crime area.
  •        Check the schools and find out their state racking. Are they within walking distance from the property you are looking to buy.
  •        Parking is another very important factor, does your potential property have tenant parking for one or two vehicles or is it street parking only.
  •        You will need to know what the average rents in the neighborhood are producing. 
Investing in multi-family property can be very lucrative, but they can also be financially draining. Do your homework, find good professionals to work with you, a Realtor and a good loan broker, I am available if you need either.  Most investments properties require more money down then regular residential loans.
You will want to learn about managing a rental property and know the tenant/landlord laws in your state. You will need to decide if you will manage or you plan to hire a managing company to run your properties.

Get the facts and know what you are doing BEFORE you invest!

Here are some websites and organizations that can provide information.




Thank you for visiting my blog, please leave your comment and questions! Join my blog on the right to receive a notice when I have a new post.

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926


Tuesday, November 8, 2016

Student Loan Debt is Primary Reason for Putting off Homeownership

Many older millennials are carrying a debt of $70,000 to $100,000 in student loans. But each generation is effected with student debt. More then half of each generation of non-owners are delaying their homeownership plans because of student debt.

The added student loan debt is cutting into the ability to qualify for a home loan as well as making it difficult to save for a down payment. This burden is also being passed onto parents with adult children unable to leave home. Parents are also taking on student loan debt to minimize their children’s debts.

Student debt is a national issue and a common problem with 70% of college students borrowing money for college. The average graduate completes school owing more then 40,000 with payment over $300 per month. This effects the ability and buying power for car loans, home loans and is driving the use of credit cards up and is effecting our nations economy.  

Hopefully in the next year we will find a way to relieve the need for large student debt. I heard some great alternative ways to pay it back may be in the works. There are also ways for student loans to be forgiven...it would be a great relieve if future employers would help where they can. 


Don't be the ONE
As a mortgage loan professional, I strongly recommend if you have student debt to keep on top of it, communication with your lender is critical. Having multiple payments due on several loans can be hard to keep track of thus causing you to miss or pay them late adversely affecting your credit. I recommend that you consolidate all your loans into one loan for easier management and lower payment overall. 
I see more people with credit issue due to student debt than any other reason. It’s crazy hard to get them cleared up and back on track. So please don’t ignore and put off dealing with your student loans.

When you are ready to purchase a home, or would like to see where you stand, give me a call or send me an email. We can work together to get you prepared to be in position to buy!
I believe in many cases if someone is thinking about buying a home and have student loan debt they are just discouraged and need guidance on how to make it work. More education about home buying and preparedness is needed. This education is available FREE! Just call me

For more information, the following paper is availabl

Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.
Click here to review



Your comments and questions are welcomed and encouraged, thank you for visiting my blog

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Saturday, November 5, 2016

USDA Loans MORE Affordable and BEST 100% Financing in the Marketplace

USDA loans are a GREAT way for anyone to purchase a home,
but especially first time homebuyers when coming up with a down payment is next to impossible for many.
Just last month USDA lowered the USDA Guarantee fee from 2.75% to 1% and the annual fee from .50% to .35% this incredible decrease will make it possible for even more buyers to qualify with lower monthly payments.
Ok so what is a USDA loan anyway? It is a US Department of Agriculture backed loan for suburban and rural home buyers, it’s a 100%... that’s right NO money down mortgage loan and part of the Rural Development Guaranteed Housing Loan Program. With reduce mortgage insurance premiums and lower then market interest rates.
I’ve been originating mortgage loans for over 20 years and this loan is by far the best, even better then FHA, that require 3.5% down payment and upfront fees of 1.75% and an annual fee of .85 for loans above 95%LTV.
There are income limits with a USDA home loan, tied to the area’s median income levels and is defined by those earning up to 115% of the county in which the property is located. Most people will find they fall within these income limitations.
The property must be eligible as well but you can easily check for income and property eligibility by clicking on this link.
USDA Property and Income Eligibility

In most cases depending on your area, owning a home and having a USDA loan could be cheaper then renting. 

If you have questions about either USDA or FHA loans give me a call or shoot me an email.
Ready to get pre-approved, let's get started. 

Your comments and questions are always welcomed and encourage. 
Thank you for visiting my blog.

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Monday, April 25, 2016

Foreclosures In Hawaii Are UP!

In the state of Hawaii where historically foreclosures have been lower than most other states Hawaii is showing an increase, state records show a jump of 21% during the first quarter of 2016 compared to the same quarter last year.

I would like to take a few minutes to express to any home owner in any state that is facing foreclosure or behind on their mortgage payments to be very cautious when being contacted by mortgage relief companies/scammers using deceptive practices to sell you the distressed homeowner their services.

These services are costly ranging from $1500 - $6000 and up!. Some typical signs of a rescue foreclosure scam is;
1.       They require an UP Front Fee for either all of part of their fee.
2.       They will guarantee to stop the foreclosure and/or get your loan modified or get the principal  balance reduced.
3.       They tell you to STOP making their monthly mortgage payments and/or start making the  payment to them.
4.       They tell you to STOP communicating with the mortgage lender.
5.       They may even pressure you to sign over the deed to your home.
6.       Some companies even claim to be government sponsored or have government loan modification programs.

Hawaii as well as has most all states now have FREE agencies to serve distressed homeowners.
Hawaii has FREE Certified Housing Counselors at; 808-587-3222 or you can go to;
www.FHIC.Hawaii.gov for more information.

For questions and a variety of legal help call Legal Aid Society of Hawaii 800-499-4302

In 2008 Hawaii enacted The Mortgage Rescue Fraud Protection Act, which can bring action against violators that can result in fines from $500 to $10,000. To file a complaint go to http://cca.hawaii.gov/consumer-complaints/

 The link below is an information site by state, just click on your state to get local help and information.

I hope this article has been informative and will help you or someone you know. Please remember above all else that HELP is FREE. Also armed with a little know how and instructions from your mortgage lender YOU can do all that is needed to get your own home loan modified. Seek local legal help and/or counselling it FREE…
Thank you for visiting my blog, I welcome your questions and comments.


Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926


Monday, March 28, 2016

Have you heard about FHA's "Back To Work" Program?

This program has been around since 2013 but not everyone knows about this program. You or someone you know may benefit so check this out!

This unique “Back To Work” program allows the lender to waive the normal 3 year waiting period if a borrower has had any one or more of these Economic Events happened that resulted in;
  • Pre-foreclosure sales
  • Short sales
  • Deed-in-lieu
  • Foreclosure
  • Chapter 7 bankruptcy
  • Chapter 13 bankruptcy
  • Loan modification
  • Forbearance agreements

It’s also important to note that an Economic Event is defined as a loss of employment, loss of income or a combination of both, the loss of income must be at least 20% for a period of 6 months. If you meet this requirement and a few others, your waiting period for a new FHA purchase loan is 12 months.
You must take, pass and get a Certificate for attending an approved HUD Homeownership Counseling Program. You must demonstrate a full recovery from the event and have extenuating circumstances that meet the guidelines set by HUD.
These extenuating circumstances is FHA-HUD’s second chance program for borrowers who have had financial hardship. What’s really cool is you can use this program for First Time Homebuyer, repeat buyer and FHA’s 203K which is their construction loan or rehab loan under the “Back To Work” program.
You better get your ducks in a row quickly however, this program is scheduled to end September of this year. So get on board and back into the housing market! Call me for a quick prequalification or questions on any type of real estate finance.
I welcome your comments and questions.
Thank you for visiting my blog

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Monday, October 12, 2015

What Is TRID and How Does It Affect Home Owner-Buyers

TRID, or TILA-RESPA Integrated Disclosure, also known as the “Know Before You Owe” rule will change how mortgages are done through altering the loan forms and practices.  The effective date was Oct 3, 2015. All residential loan application taken on or after Oct 3rd 2015 will be under this new rule. The over sight of this new rule is the CFPB or Consumer Financial Protection Bureau.
There will be two new forms under TRID for home buyers — the Loan Estimate and the Closing Disclosure. These two form are said to be easier to understand then the previous GFE = Good Faith Estimate and HUD1 = Closing Statement.  The new forms are more specific with the terms, loan amount and whether the amount can increase after closing for each section of the form. It will also detail features of the loan like a prepayment penalty or balloon payment. TRID being part of TILA-RESPA will affect all 1-4 unit residential purchases and refinances of owner occupied property. Excluding Reverse Mortgages, investment or commercial properties.
The regulation also gives the buyer more time to review the closing costs and all fees associated with the mortgage loan. The first new form received by the buyer is the Loan Estimate due 3 days after applying for the loan. The second new form received by the buyer is the Closing Disclosure and must be presented three days before closing.
Anytime there is a correction or addition to forms they must be sent back to the buyer for another review and be signed. This is going to cause delays in the closing process. It is recommended that at least for a short time until the closing process can be managed properly the Realtors add a couple weeks to new escrows.
The industry has been preparing for TRID for months with new software for the new forms, training of loan officers, closing agents and other effected personnel. The burden is on the lender for compliance and the CFPB has given no shake out period or buffer period for mistakes that may happen. Just last week on Oct 7, 2015 just 4 days after the effective day of TRID the house passes “Homebuyers Assistance Act” H.R. 3192 which will provide a hold harmless period until Feb 1, 2016 for good faith efforts to comply with the TRID rule. The vote was 303 to 121, now the bill is headed to the Senate, however the White House is not supportive of this new bill and has threaten to veto any hold harmless bill.
My personal option is that we have been preparing for this change for several years, we knew the GFE they introduce Jan 1, 2010 that was supposed to be easier to understand for the consumer was just the opposite. The old HUD1 is not hard to understand but it’s normally not seen by the buyer until the day of closing. That doesn’t give the buyer enough time to review the figures. I like the new forms and looking forward to seeing them and the new time line restrictions in play, I see some delays in the beginning but soon will be business as usual for our industry. The lenders are ready and we will all benefit from a well informed buyer.
I think our political representative in the house and senate are wasting valuable time on this issue. Go fight for world peace, clean water and food for every human being on earth. We got this! 
If you have any questions about TRID give me a call or email me.
Thank you for visiting my Blog, your comments and questions are welcome and encouraged. 
Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Monday, April 27, 2015

Knowing The Difference Between Warrantable vs. Non-Warrantable Condos

If you are interesting in buying a condo then this information is very important to you.
Knowing the difference between the two can save you money in the end. If you are a Realtor and your market area consist of condo projects, you need to educate yourself to better assist your buyers and help them better understand the difference between the two types.

A Warrantable Condo means the condominium project meets the guidelines and can be sold to Fannie Mae and Freddie Mac. Lenders feel that these projects features are protected from future hazards that could threaten the value of the units. These loans are less risky.

A Non-Warrantable Condo means the condominium project does NOT meet the guidelines and cannot be sold to Fannie Mae and Freddie Mac. Therefore many lenders will not lend on these condo projects. They are considered risky, this doesn’t mean there is no financing available for this type of condo but you can plan on paying more in rate/fees and down payment requirements will be higher.

Now you are probably asking ok, what are the guidelines right?
Warrantable guidelines;

Occupancy is important if you are buying as an investor at least 51% of the unit must be owner occupied or be second homes. If you are buying and intend to occupy your unit there is no requirement for owner occupancy.

On an existing or established project at least 90% of the units must be sold, project is complete including all units and common elements, not subject to additional phasing and the control of homeowners association has been turned over to the owners.

On a new or currently converted project 70% of the units must be conveyed or under ratified contract to
Owner occupied and second home owners, non-owner occupied (investor) may not be included towards pre-sale.

Owners more than 30 days delinquent on HOA dues cannot be more than 15%

No more than 10% of the project can be owned by a single entity.

No more than 20% can be used for commercial or non-residential use.

The HOA budget must have at least 10% designated for replacement reserves

There are insurance requirements and more budget conditions but generally specking these would get you started. To be sure of the condo project you or your client is looking at is warrantable, you will want to see if their condo docs include a Condo Questionnaire or Lender Disclosure form. This document is normally completed by the managing agent for the association and must be dated frequently and must be dated within 90 days of underwriting a loan, many management companies have it on hand and ready. Most will charge a fee for this document. Some lenders will require a custom form be completed also at a cost to the buyer. It’s good to get this done prior to spending money on appraisals and other inspections. 

In order to find out if your condo is warrantable you will need to know what type of condo project you are looking at because there are several different types that require different types of guidelines for review requirements and appraisal requirements; have I lost you yet? Crazy right?

A condominium is defined as a real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas. A condominium unit is a one (1) unit dwelling located in a condominium project. A low-rise condominium is defined as one-to-four units. Agency guidelines apply. A high-rise condominium is defined as five or more units. Agency guidelines apply and would require a Full Leader Review.

Condo Property Regime (CPR); this means the property is a condo and will have some condo elements, like HOA and condo documents. CPR homes can be single family (detached condo) and some are attached. Condo projects that consist of solely detached dwellings (site condo) may use a Uniform Residential Appraisal report 1004 in lieu of the 1073 condo report. This type is also only subject to a limited review.

There are more types; 2-4 unit condos, attached and detached. 

Now let’s talk about NON-Warrantable Condos and what would cause a project to not be eligible to be sold to Fannie Mae or Freddie Mac.

Developer is still in control of the homeowners association.
Project is still subject to additional phasing or add-ons which have not yet been completed.
All common elements and amenities are not fully installed or completed and in operation
At least 70% of all unit must have been sold or legally obligated to close.

It is also safe to say that just because a condo project is non-warrantable at one point doesn't mean it couldn't become warrantable at a later time.

Non-Warrantable property types;
A condominium hotel (or condotel) is defined as any project that is managed and operated as a hotel, resort, motel, inn, or lodge and, therefore, is not a residential project, even though the units are owned individually.
 A project with any one or more of the following characteristics is considered to be a condotel:
  • Rental pooling agreements, either mandatory or voluntary, that allow or require the unit owners to either rent their units or to give a management firm control over the occupancy of the units.
  • Maid service, 
  • Room service, 
  • Shared revenue, 
  • Units that do not contain full-sized kitchen appliances, 
  • Nightly/daily occupancy units, 
  • The project is marketed as a hotel including, but not limited to, projects with units that are available to be rented on a daily basis or projects with names that include the words “hotel,” “resort,” “motel,” “inn,” or “lodge,” Advertising rental rates, Zoned commercial/residential, Square footage of a unit is less than 600. (See the note below.)
  • Reservation services desk, if not part of commercial space, 
  • Declarant control of the condotel exceeds 10 years, 
  • Central key systems,
  • Franchise agreements, 
  • Units are marketed for sale based on the availability of short-term rental rates, a significant level of hotel-type services,
  • Restrictions on the owner’s ability to occupy the unit.
  • Restrictions on interior decorating, 
  • Non-incidental business operations owned or operated by the owner’s association such as, but not limited to, a restaurant, and an interconnecting phone system.
Note: When square footage of a unit is less than 600, it should be reviewed in detail to ensure that the project is a condominium versus a condotel,
  • Cooperative projects, 
  • Timeshare or segmented ownership projects, 
  • Houseboat projects
  • Multi-dwelling unit condominiums, 
  • Condominium projects that represent a legal, but non-conforming, use of the land, if zoning regulations prohibit rebuilding the improvements to current density in the event of their partial or full destruction, 
  • Any project for which the owner’s association is named as a party to current litigation or, for any project that has not been turned over to the association, for which the project sponsor or developer is named as a party to current litigation that relates to the project, 
  • Note: Projects where the homeowners’ association is named as the plaintiff in a foreclosure action, or as a plaintiff in an action for past due homeowners’ association dues, are not considered ineligible projects. 
  • Condominium projects with residential leases, 
  • Investment securities, 
  • Common interest apartments or community apartment projects, 
  • Projects with non-incidental business operations owned or operated by the owner’s association such as, but not limited to, a restaurant, spa, health club, etc., 
  • New projects where the seller is offering sales/financing structures in excess of Fannie Mae’s eligibility policies. This includes, but is not limited to, special incentives to purchase (i.e. paid HOA fess, Club memberships, automobiles, principal and interest abatements and/or builder/developer contributions not disclosed on the HUD-1 settlement statement.)
I hope this information has helped you to understand some of the complexity of condos lending and how they are looked at by the lenders. I would like to add that financing is available to both Warrantable and Non-Warrantable condo, but it’s very important to know at the get go what a particular condo is and most importantly prior to deciding what type of loan will be needed to satisfy the buyer. Due diligent is highly recommended. Being in the know will save the buyer money, as a Real Estate agent you will want to protect your buyer against unnessesary fees. Also knowing prior to opening escrow will save much valuable time. All condos as you can see are not created equal.

I welcome all questions and comments, thank you for taking the time to read my blog post. Be sure to follow my blog from Google or Facebook. You can also subscribe to my Newsletter on right side of blog, get weekly updates on the changing markets. Thank you

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926