Condo approvals
Spot approvals
To get mortgage at a competitive interest rate on a condo, the project has to be approved. Spot approvals are available for conventional loans only, and for mature projects only. FHA has eliminated spot approvals.
Condo certifications
Condo certifications have been delegated to certified lenders. There are a number of certification and approval processes that can faciliate conventional, FHA, and other loans.
Condo pre-qualifications
If you want to be pro-active for any of your listings (or for a buyer maybe) I am willing to work with you and prequal the project. The first step is a short review to see if there are any issues that may prevent certification.To do this, have this checklist completed by the management company, and then return it to me. I can let you know the same or next day if the project will likely be approved for a mortgage loan.
Common issues
Below are some common issues affecting certifications. I caution not to draw quick conclusions about a project's eligibility. There are many elements to be considered, and the devil is always in the details! Contact me for assistance.
- Ownership concentration, with a single party (not including the builder or sponsor usually) owning a significant number of the units. 10% is a common standard.
- Rented units. A limited percentage of the units are allowed to be investor units. 20% and 50% are common thresholds.
- HOA control. Has HOA control been transferred to the owners, for how long - and if not, will this occur in compliance with certification rules?
- HOA dues arrears of more than one month on a certain number of units, 10% is a common standard.
- Pre-sales of units in a new project. 30% and 51% are common standards.
- Condo conversions (even mature conversions) are subject to unique requirements.
- Number of units. Many standards vary, depending on the number of units in the project.
To get the checklist for project prequal go here.