2. Condo Sales Growth
• According to recent
housing statistics from
Florida Realtors,
existing home and
condo sales rose in
2011 by 13% on
existing home sales and
29% on existing condo
sales, compared to the
statistics from 2010.
• Condos offer a huge
opportunity to increase
your overall sales and
business as a Real
Estate Agent.
3. Financing Condos
Condos fall into two categories for financing. Each
have their own guidelines in regards to lending.
Warrantable Non-Warrantable
4. Warrantable Condos
Through Fannie Mae
• Most of the units are Owner-
Occupied.
• For existing condo projects, 90%
must be sold.
• For new construction projects, 70%
must be closed or under contract.
• No more than 15% of the units can
be 30 days behind on HOA dues.
• No more than 10% of the project
can be owned by a single entity.
• HOA must budget at least 10% of
income for replacement reserves.
• HOA cannot be in control of builder.
• This list is not all inclusive.
• Warrantable means Fannie-Mae will
insure the loan.
5. Warrantable Condo Search
• https://www.efanniemae.com/sf/refmaterials/approvedprojec
ts/index.jsp
• Google “Fannie approved condos”.
• At bottom of page is State list , click on State for pdf of
warrantable condos.
• Listing Agent should also know if the Condo is Fannie/FHA
approved.
6. Fannie Mae
Lending Guidelines
• 620 middle credit score.
• At least 25% down payment
required.
• Total debt ratio no greater that
45%, 50% if compensating
factors.
• Factors include 6 months PITI
reserves, higher credit score,
verifiable rent for 12-24 months,
etc.
• HOA condo questionnaire to
determine eligibility hasn’t
changed. $200 - $400 hard cost to
Buyer.
• Approve/Eligible DU/AUS
findings.
7. Warrantable Condos
FHA Approved
• 50% or more of the units are Owner-
Occupied.
• FHA concentration less than 50%.
• For existing condo projects, 50% must be
sold.
• For new construction projects, 50% must be
closed or under contract.
• No more than 15% of the units can be 30
days behind on HOA dues.
• No more than 10% of the project can be
owned by a single entity.
• Cannot be within 1000 feet of a heavily
traveled road, 3000 feet of railroad, one mile
of airport, or five miles of military airport.
• Cannot be in designated wetland or flood
zone.
• HOA cannot be in control of builder.
• This list is not all inclusive.
8. FHA Approved
Condo Search
• https://entp.hud.gov/idapp/html/condlook.cfm
• Google “FHA approved condos”.
• Input State and Zip Code field.
• Listing Agent should also know if the Condo is FHA approved.
• FHA charges $1500.00 to approve a condo project, which is a
hard cost to the Borrower if not currently approved.
9. FHA Condo
Lending Guidelines
• 580 credit score minimum, must meet
exact FHA underwriting guidelines.
• 640+ credit score uses DU/AUS results.
• At least 3.5% down payment required.
• Total debt ratio no greater that 45%,
56.99% if compensating factors and
over 640 credit score.
• Factors include 3 months PITI
reserves, higher credit score,
verifiable rent for 12-24 months, 10%
down etc.
• HOA condo questionnaire to
determine eligibility hasn’t changed.
$200 - $400 hard cost to Buyer.
• Approve/Eligible DU/AUS findings.
10. Non-Warrantable Condos
Break Down Into Two Categories
• Credit score above 620. • Credit score below 620.
11. Good Credit
Non-Warrantable Condo
• 30% minimum down payment
620-679 credit score
• 20% minimum down payment
680+ credit score.
• Minimum purchase price of
$100k.
• Available on 5/1 and 7/1 arms
near conforming rates.
• Maximum debt ratio of 45%
• Condo-Tel minimum down
payment = 30%.
• LTV guidelines apply to Primary,
Second home, and Investment
properties
• Turn time 6-8 weeks for approval.
12. Bad Credit
Non-Warrantable Condo
• Private investor loan through our
network.
• 35-40% down payment required.
• Interest rates typically double
digit, 10% - 15%
• Terms of 3 year and 5 year
balloons.
• Individual investor will have their
specific terms.
• Higher loans costs. Average 3% in
origination, have seen as high as
7%. Investor specific.
• Minimum loan amount of $50k.
• Turn time typically 2 -3 weeks.
13. Profitable Opportunity
• Florida had a very high
condo concentration.
• Condos present unique
lending challenges that
can be overcome
through accurately
qualifying the Buyer.
• Overall average sales
price is higher, leading
to increased
commissions.
