Fannie Mae-Freddie Mac Condo Guidelines On Conventional Loans

This Article Is About Fannie Mae-Freddie Mac Condo Guidelines On Conventional Loans

Fannie Mae-Freddie Mac Condo Guidelines allow qualified borrowers to qualify for conventional loans with a 3% down payment on condos. Condominiums are becoming increasingly popular in the past few years. Many senior homebuyers 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. Conventional Condo Guidelines allow condo buyers to qualify for 3% down payment conventional loans. Condos are considered riskier investments by lenders. There are more loan level pricing adjustments than single-family homes. Rates are higher on condos due to risk-level pricing adjustments.

We will discuss Fannie Mae-Freddie Mac Condo Requirements and Guidelines in this blog.

Understanding Fannie Mae-Freddie Mac Condo Guidelines

Fannie Mae-Freddie Mac Condo

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 Condo HUD Guidelines, the condo complex needs to be 51% or more owner-occupant. If it is 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. A 20% down payment is required on non-warrantable condos. Gustan Cho Associates also offers condotel financing with a 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’s eligibility requirements allow 3% down payment condo purchase conventional loans to borrowers who qualify on owner occupant condos. Second-home condos require a 10% down payment. Investment condos require a 20% down payment. The condo project needs to meet Fannie Mae-Freddie Mac Condo Guidelines. Only warrantable condos are allowed conventional financing per Fannie Mae and/or Freddie Mac Guidelines.

condominium project questionnaire is required. Needs to be completed by the HOA Manager of the condo complex. The questionnaire is then reviewed by a mortgage underwriter to determine whether or not it meets Fannie Mae and/or Freddie Mac Agency Guidelines.

What Are Condotel Financing?

What Are Condotel Financing?

Condotel Units are condominium units in a hotel complex. 

Some hotels have a set number of units set aside as condotels. Private owners can purchase condotels. Most lenders shy away from condotel financing. Gustan Cho Associates is one of a few lenders that offer condotel financing.  Condotel and non-warrantable condos are portfolio loans. A 25% down payment is required on condotel second homes. 40% down payment on investment condotel units. One year’s reserves. 500 minimum square feet. Condotel Unit needs at least one bedroom. The Condotel unit needs to have a fully functional kitchen. The condo complex cannot have any 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 a 20% to 30% down payment. NON-QM Loans are portfolio loans and are outside of government and conforming guidelines. GCA Mortgage has lending partnerships with dozens of non-QM wholesale lenders. If you need to qualify for non-QM or alternative mortgage loans, please contact us at Gustan Cho Associates at 262-716-8151. Or text us for a faster response. Or email us at [email protected]  The Team at Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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