In December, I wrote these two blogs:
Can’t Waive Contingencies For Condos
and
Have A Condo Listing? What Listing Agents Can Do To Ensure Faster Closes & More Marketability
I was reminding readers that no matter how strong a borrower is, we often cannot waive or even shorten contingencies for condo purchases because it takes us so long to get the necessary condo documents which we then have to review to ensure the condo project is “warrantable” (eligible for Fannie/Freddie financing).
And we don’t dare assume a condo is warrantable nowadays, unless we have proof of that fact in a very reliable and recently updated database – given all of the problems condos are facing with budget, insurance, litigation, and structural issues.
If we do assume a condo is warrantable and it is not, we could end up with an unsalable loan that could cost us tens of thousands or even hundreds of thousands of dollars (which has happened unfortunately).
When we explain all this to agents, they often say: “Don’t worry, I have everything…” And they then send PDFs with thousands of pages that contain everything but what we do need.
The Documents Lenders Need
If agents want or need fast answers, we provide a list of the documents we need – set out below:
- Filled Out Condo Questionnaire (we provide the blank form, but this is the most difficult to obtain)
- 3 Months of Meeting Minutes
- A Budget
- A Reserve Study
- All Litigation Docs (if applicable per the questionnaire)
- Special Assessment Docs (if applicable per the questionnaire)
Once we get all of those items, we can do the full review very quickly.
But without them, we need a long contingency and can make no promises.
Non-Warrantable Condo Financing Options
I might add here too that we also have many financing options for non-warrantable condos, but shopping those options takes time (and similar documentation on occasion) as well.
