Condo Loans – Understanding the Basics
WHICH LOAN PROGRAM OFFERS CONDO FINANCING?
- VA Loan Program: Basic qualifications state that 50% or more of the units in the building must be owner occupied, no more than 15% of the owners can be behind on Homeowners Association (HOA) fees, and if the condo is newly constructed that 75% of the units must be sold prior to allowing VA loans.
- USDA Loan Program: Condos are deemed acceptable to RD (Rural Development) only when the project has been approved by Fannie Mae, Freddie Mac, HUD or VA. In addition, the buyer remains responsible for obtaining individual homeowners insurance as applicable. For more information on USDA financing for condos click here.
- Conventional Loan Program: Condos currently only available with up to 80% financing with additional underwriting requirements. Condo financing subject to additional terms and conditions based on the project.
- FHA Loan Program: In order to receive FHA financing for a condo, the unit must meet certain requirements to become FHA approved. A condo project will not be designated “FHA approved” unless it has at least two units, and is covered by hazard, liability and other insurance where applicable. The FHA will not approve a condo project unless at least half the units have been sold prior to the FHA’s endorsement of the first loan in that building. Click here to search through eligible condo list on the HUD website.
Additional credit conditions and qualifying criteria remain for the above loan programs.
Are You In the Market For a Condominium?
Without the right assistance, qualifying for a condominium mortgage can be very difficult and overwhelming. It’s always best to discuss your options with a trusted lender you can trust like Metroplex Mortgage Services. Our financing expertise has helped thousands of homebuyers become happy homeowners and we can help you too!
If you are in the market for a home it is important to become pre-qualified. You can get started in less than 5 minutes! Or you may contact us with any questions you may have.
Questions? Contact Us Here.
More specific loan program information can be found at our Condo Loan Blog.