Should you buy a condo that is unwarranted? This is a great question. What exactly does it meant to be unwarranted? “Condo projects and properties which don’t meet Fannie Mae and Freddie Mac warrantability standards are known as non-warrantable. Meaning the financing may be harder to obtain” says Gina Pool-The Mortgage Reports.
“Condo projects and properties which don’t meet Fannie Mae and Freddie Mac warrantability standards are known as non-warrantable.
Non-warrantable condos are more challenging to borrow against.
Typically, a condo is considered warrantable if:
- No single entity owns more than 10% of the units in a 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
- There is no litigation in which the homeowners association (HOA) is named
- Commercial space accounts is 25 percent or less of the total building square footage
Because of these rules, some of the common property types which fall into the non-warrantable category include condotels, time shares, fractional ownership properties, and other projects which require owners to join an organization, such as a golf club.
Manufactured housing projects and other developments which are not legally considered real estate are also excluded from warrantability, including house boat and motor home projects.
When you’re buying a condo, one of the first questions you should ask your real estate agent or lender is related to the building’s warrantability.
A warrantable condo will get you access to lower mortgage rates than a non-warrantable condo because warrantable condos are lower risk to the bank.” According to a recent article written by Gina Pool- The Mortgage Reports.
As a buyer it is very important to do your due diligence in determining all the facts about a condo development before making the decision to purchase. You will need to have a detailed conversation with both your agent and lender to make sure you fully understand the risks involved in purchasing an non-warrantable condominium.
Holding Firm Against the Tide | Realtor Magazine
Steady U.S. economic growth will help lift home sales moderately in 2016, but persistent inventory shortages will continue to put upward pressure on prices, holding back first-time buyers. That’s a thumbnail of the year ahead for home sales, according to NAR Chief Economist Lawrence Yun.
Home buyers are difinately feeling the pinch as they are trying to find homes to purchase. Portland and its surrounding areas found the lowest months of inventory in the month of Decmeber. What is the forecast like for 2016? click on this article for a glimpse of whats to come in 2016.