Fannie Mae-Freddie Mac Condo Guidelines On Conventional Loans


Fannie Mae-Freddie Mac Condo Guidelines On Conventional Loans

This BLOG On Fannie Mae-Freddie Mac Condo Guidelines On Conventional Loans Was PUBLISHED On March 11th, 2019

Fannie Mae-Freddie Mac Condo Guidelines allows qualified borrowers to qualify for conventional loans with 3% down payment on condos.

  • Condominiums are becoming increasingly popular in the past few years
  • Many senior home buyers gravitate towards condominiums versus single-family homes
  • Younger millennial home buyers also gravitate towards condos versus single-family homes
  • Many single non-married home buyers often want to purchase a condo versus single-family homes
  • The main reason buyers want to purchase condominiums is that it does not need hands-on maintenance like single-family homes
  • Homeowners who travel often and leave their homes vacant may consider a condo purchase due to security reasons
  • Fannie Mae-Freddie Mac Condo Guidelines allows condo buyers to qualify for 3% down payment conventional loans
  • Condos are considered riskier investments by lenders so there are much more loan level pricing adjustments than single-family homes
  • Rates are higher on condos

We will discuss Fannie Mae-Freddie Mac Condo Guidelines on this blog.

Understanding Fannie Mae-Freddie Mac Condo Guidelines

Condominium Loans are different than single-family home lending guidelines.

  • Under Fannie Mae-Freddie Mac Condo Guidelines, the borrower and the property need to qualify
  • Once the borrower qualifies, then the condominium project needs to qualify
  • Condos need to be warrantable
  • To meet warrantable Fannie Mae-Freddie Mac Condo Guidelines, the condo complex needs to be 51% or more owner occupant
  • If it 51% or more non-owner occupant, it is classified as non-warrantable
  • Non-warrantable condos do not qualify for conventional loans

Gustan Cho Associates have non-warrantable condominium financing available. 20% down payment is required on non-warrantable condos. Gustan Cho Associates also offers condotel financing with 25% down payment.

Fannie Mae-Freddie Mac Condo Guidelines And Requirements

Both Fannie Mae and Freddie Mac Condominium Guidelines are similar. 

Freddie Mac and Fannie Mae eligibility requirements allow 3% down payment condo purchase conventional loans to borrowers who qualify on owner occupant condos. Second home condos require 10% down payment. Investment condos require 20% down payment. Condo project needs to meet Fannie Mae-Freddie Mac Condo Guidelines.

condominium project questionnaire is required and needs to be completed by the HOA Manager of the condo complex. The questionnaire is then reviewed by a mortgage underwriter.

What Are Condotel Financing?

Condotel Units are condominium units in a hotel complex.

  • Some hotels has a set number of units set aside as condotels
  • Private owners can purchase condotels
  • Most lenders shy away from condotel financing
  • Gustan Cho Associates at Loan Cabin Inc. are one of a few lenders that offer condotel financing
  • 25% down payment is required on second homes. 40% down payment on investment condotel units
  • One year’s reserves
  • 500 minimum square feet. Condotel Unit needs at least one bedroom
  • Condotel unit needs a fully functional kitchen
  • No pending litigation

Freddie Mac Condo Requirements

Freddie Mac and Fannie Mas have similar condominium requirements

Both Freddie Mac and Fannie Mae require condos to be warrantable condos. condo buyers who want to purchase non-warrantable condos can qualify with us at Gustan Cho Associates with nonqm loans. NON-QM Loans require 20% down payment. NON-QM Loans are portfolio loans and are outside of government and conforming guidelines. Please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.  The Team at Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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