Tips When Buying A Condo

Dated: 05/31/2017

Views: 540

Condominium buying and selling, things to know.

Mortgage lenders use a different set of rules when you buy a condo.  It is not just your creditworthiness the lender has to consider when you apply for a mortgage to purchase a Condo. They must also confirm that the condominium development has strong financials and management structure.  Not all condominium developments meet the strict Fannie Mae and Freddie Mac guidelines that allow them to be classified as "warrantable". Some Condominium developments do not meet the minimum standards and are designated non-warrantable. Non-warrantable condos are more challenging to finance.  When buying a condo it is important to ask the real estate agent, developer or mortgage lender about the building's warrantability before submitting an offer.

A condo is considered warrantable if:

  • No single entity owns more than 10% of the units in the project, including the developer

  • At least 51% of the units are owner-occupied

  • Fewer than 15% of the units are in arrears with their association dues

  • The homeowners association (HOA) is not named in any lawsuits

  • Commercial space accounts for 25 percent or less of the total building square footage

A condo unit is considered non-warrantable if:

  • The project has yet to be completed

  • Its developer has not turned over control of the HOA to the owners

  • The community allows short-term rentals

  • A single person or entity owns more than 10% of all units

  • It's in a project where the majority of units are rented to non-owners

  • Lack of proper reserves

  • More than 15% of the units are 60 days in the arrears on their HOA fees


Blog author image

Donna Podesta

I am an experienced Realtor working in the Greater Hudson Valley Region which includes both Rockland and Orange County. My goal is to make my client's real estate experience a happy one. Because succe....

Want to Advertise on this Site?

Latest Blog Posts

DRY JANUARY IS THE TALK OF NYACK

Dry January is a phenomenon that is sweeping the world. It was started in 2013 in Great Britain by the charity Alcohol Concern. British celebrities Alastair Campbell and Peter Osborne decided to

Read More

Why Rent When You Can Own In Stony Point

Own a piece of history! Adorable 3-4 bedroom, 1 bathroom home in the heart of Stony Point. 1368 SqFt. Three finished levels with enclosed porch, large storage area, and a 1-car attached

Read More

5 Easy Steps To Avoid Media Information Overload

Feeling overwhelmed by all the information (conflicting information a lot of the time) available on media, social or otherwise? Here are some steps to take to make it all manageable. This applies to

Read More

Wishing All Of Nyack A Healthy 2020

January is the time of New Year resolutions. Gym memberships surge as people vow to add a healthy work out into their lives. The sad thing is by February, those exercise machines are idle again.

Read More