Posts

Owner Occupancy Ratios; Appraisal Management Companies – Problems & Solution

Reminder: Owner-occupancy ratios for condos are irrelevant if a buyer plans to occupy the unit; owner-occupancy ratios can be well under 50%. One of the primary reasons we left the broker channel in 2014 was appraisal issues. The wholesale banks forced us to use large appraisal management companies (AMCs), and it was a nightmare. Prior […]Read More

Click-Throughs; Why Borrowers Qualify For Larger FHA Loans? 56.99%

In our recent monthly newsletter, we measured “click-throughs” for our various articles. Interestingly, the mortgage-related article about debt ratios got the most views. Two things: (1) Be sure to measure your click-throughs when you email newsletters; and (2) Here’s something mortgage related: The same borrower can often qualify for a much higher loan amount if […]Read More

Beware of Homeowner’s Association (HOA) Dues; Lower Qualifications

As the prices of single family residences (SFRs) continue to climb, we have more and more borrowers shifting their home searches to condos and townhouses. The problem is that they (and their Realtors) often do not account for the impact of HOA dues on their maximum qualification amounts. HOA dues range from $200 to well […]Read More

How To Skirt Condo Issues With “Limited Review”

Yesterday’s blog outlined potential concerns when financing a Condo. There is a tactic to skirt the concentration issue, when one party or entity owns more than 10% of the units. A strong borrower who puts at least 20% down can garner a “Limited Review” Approval with a select number of our lenders. This type of […]Read More

Condo Concerns? What To Look For

Things to consider when looking at Condos: 1. Rates are usually higher for condos if the down payment is less than 25%. 2. Concentration Rule. Does one owner own more than 10% of the units? If so, most lenders won’t finance the units. 3. Litigation. If the HOA is involved in litigation, most lenders will […]Read More

Property Type and Fico Score Can Significantly Affect Rate

We recently had a borrower request a verbal rate estimate after telling us her credit was perfect and that she was buying a townhouse/PUD. We estimated her “no points” rate at 3.875%, assuming her credit score was above 740. Her credit score was actually 718, and she was buying a condominium. The combination of these […]Read More

Property Type Affects Pricing; Condos Look Like PUD/Townhouse

Property types affect pricing and financing – Condo/PUD Distinction: Condos and PUDs (Planned Unit Developments) can look identical but have different zoning and different pricing and financing options. Attached side-by-side two-story units that all touch the ground can be zoned “CONDO” or “PUD.” Complexes with units that float (that do not touch the ground) will […]Read More

Owner Occupancy Ratios for Condo Complexes

We are still getting questions about required Owner Occupancy ratios in Condo Complexes. At many of our lenders, if the financing is “Owner Occupied”, the owner-occupancy ratio is irrelevant. Again, Owner Occupied Buyers do not need to worry about Occupancy Ratios in most cases. It is only when the financing is FHA or NON-Owner Occupied […]Read More

Question HOA Owner Occ %’s; HOA Not Always Right

We have an investor buying a condo. Condo complexes need to be over 50% owner occupied for “investor” financing. Owner occupancy ratios are irrelevant for owner-occupied financing. The HOA initially told us that the Owner Occupancy ratio was 44% (too low for investor financing). The HOA simply based their estimate on the % non-site addresses […]Read More

Condos: Owner Occ Ratios; Litigation OK?

We are repeating a few Condo guidelines again b/c we get asked so often. Owner Occupancy Ratios for Condos are irrelevant if a borrower is an owner-occupant. The condo complex can have 20% owner occupancy rate, for example. This is the same case for borrowers seeking FHA financing; if the complex is FHA approved, the […]Read More

Condo vs. PUD/Townhouse

We were asked today about the differences in financing in regard to Condos vs PUDs/Townhouses. “PUD” stands for Planned Unit Development. Condo owners do not own the land underneath their units. Many condos, in fact, do not sit on land but “float” on 2nd or higher floors. PUD/Townhouses always sit on land, as “ground floor” […]Read More

Condo Owner Occupancy Ratios Re-Visited; 2 to 4 Units – All But One

We had many questions on Monday about Owner Occupancy Ratios and condos, so we want to reiterate this: If a buyer intends to occupy a condo, his financing will not be affected by the owner occupancy ratio. This is the case no matter how low the occupancy ratio might be. The occupancy ratio will not […]Read More

Condo Owner Occupancy Ratios Irrelevant for Owner-Occupants

This is a reminder that Condominium Owner-Occupancy Ratios are irrelevant if the person seeking financing intends to occupy the unit she is buying. It is only investors looking for financing who need to worry about occupancy ratios. Most investor financing requires occupancy ratios greater than 50%. Jay Voorhees Founder/Broker | JVM Lending (855) 855-4491 | DRE# […]Read More

Owner Occupancy Ratios for Condo Complexes

Owner Occupancy Ratios for condo complexes are irrelevant for owner-occupant buyers and borrowers, if the condo complex has 5 or more units. 2 to 4 unit condo complexes must be over 50% owner-occupied no matter what. Investors financing condos can only get financing if the owner-occupancy ratio is over 50%, irrespective of the size of […]Read More

Rates Same for SFRs & Townhomes; Higher for Condos > 75% LTV

Interest rates for Single Family Residences (SFRs) and Townhomes are the same. There are no “add-ons” or “hits” for financing a Townhome/Planned Unit Development (PUD). Condos, however, with loan-to-values above 75% have rates approximately 1/8 to 1/4 percent higher than those associated with SFRs and Townhomes. Condo buyers looking for the very best interest rates […]Read More

Condo Complexes Do NOT Need to Be FANNIE MAE Approved

Condo Complexes do not need to be Fannie Mae approved. All condos are eligible for conventional Fannie Mae financing as long as they meet standard conditions, including: (1) No major litigation; (2) No concentration of ownership – one person cannot own more than 10% of units; (3) HOA Dues are paid on time by over […]Read More