Qualifying For Non-Warrantable Condos And Condotel Loan Programs
This BLOG On Qualifying For Non-Warrantable Condos And Condotel Loan Programs Was UPDATED On August 6, 2017
Non-Warrantable and Condotel loan programs have been dormant for the past several years but have now come back.
- Condotel loan programs are one of the most popular and fastest growing mortgage loan programs today.
- Condotel unit sales are soaring nationwide especially in California, Texas, Indiana, Texas, Florida, Washington, and Illinois as well as the rest of the United States.
- Non-Warrantable and Condotel Loans are 30 year adjustable mortgages with no pre-payment penalties.
Types Of Non-Warrantable And Condotel Loan Programs
Non-Warrantable and Condotel loan programs are portfolio loans that are available only in 3/1 ARM, 5/1 ARM, and 7/1 ARM, amortized over 30 years.
- Starter rates are at 4.75% .
- The index is based on the one year cost maturity treasuries (CMT) and the margin is set at 3.0%.
- These loans are non-conforming loans.
Non-Warrantable And Condotel Financing Requirements
To qualify for our non-warrantable and condotel financing, the condominium unit needs to qualify.
- This is simply done by having the homeowners association project manager complete a one page Condominium questionnaire.
- The main reason for this Condominium questionnaire is to make sure that the Condominium project is financially sound with no outstanding structural and building violations by the city building department.
- No pending lawsuits.
Once the Condotel homeowner association project manager completes the Condotel questionnaire, it is submitted to underwriting where you will get an approval within 24 hours upon receipt.
- Non-Warrantable and/or Condotel unit needs to be a minimum of 500 square feet with at least one bedroom and a functional kitchen.
To qualify for our Condotel loan programs, the Condotel mortgage borrower needs at least a 680 FICO credit score.
- The maximum back end debt to income ratio is 43%.
- 20% down payment on non-warrantable condos and 25% down payment on condotels for owner occupant and second homes.
- 40% down payment on investment condominiums.
- We require one year’s reserves for the subject Condotel unit housing expenses as well as the borrower’s primary residence.
- Reserves can be investment and securities accounts, pension, 401k, IRA, and other liquidable accounts.
Condotel Loan Programs Mortgage Process
- Complete the full 1003 mortgage application.
- Once it has been submitted, we will run a soft pull credit check and evaluate the Condotel loan application.
- One of our loan officers will then discuss rates and terms to qualify for on one of our Condotel loan programs.
Get Pre-Approved For A Condotel Loan Now
We can then issue you a pre-approval where you can shop for your Condotel.
- Once you have a purchase contract, we can start processing and underwriting your Condotel loan application.
- Normally it takes three weeks to close your new Condotel unit from the date we receive your signed Condotel loan application and required documents.