If you’re looking at a Condo, there are three numbers to know:
1) % of owners delinquent with HOA Dues: Less than 15% of owners must be less than 60 days late.
This number is often an issue after market corrections b/c people are more likely to walk away from condos (and stop paying HOA dues) if they are under water. This is why rates are higher for condos.
2) % of ownership of ALL units by a single owner: Greater than 10%. This is called the “concentration rule.”
Fannie and Freddie won’t finance a condo if a single owner owns more than 10% of the units. If it is a 5 – 20 unit project, the limit is simply two units by one owner.
3) Owner Occupancy Ratio: 50% of the units must be owner-occupied, ONLY if the buyer is an investor.
Owner occupancy ratios are irrelevant for owner occupant buyers.
For 2 – 4 unit projects, all but ONE unit must be owner occupied no matter what.
4 Units: Three must be owner-occupied
3 Units: Two must be owner-occupied
2 Units: One must be owner-occupied
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167