Condo finance

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Condo finance

  1. 1. Non-Warrantable Condo and Condotel Loans
  2. 2.  Non Warrantable Condo & Codotel Loans When Fannie Mae or Freddie Mac determine a condo project isn’t eligible under their guidelines the project is called a
  3. 3.  The project does not fit the three Fannie Mae or Freddie Mac class guidelines. Banks typically do not like to lend on condominiums in non warrantable condo projects because they cannot be insured and cannot be sold off to an investor. The only lenders who will lend on a non warrantable condo project is a portfolio lender. Non warrantable condo portfolio lenders lend their own money and hold the loan for servicing in their “portfolio” of loans. Non warrantable condo porfolio lenders tend to lend on riskier real estate transactions and give higher rates due to the risk. Yes…this means a non warrantable condo and condotel typically have higher rates.
  4. 4.  Nationwide Non-Warrantable Condo and condotel Lending Purchase, R&T and C/O Refinance Full Documentation Only 680 FICO Minimum Fixed 30 & 15; ARM: 3/1, 5/1, 7/1 80% LTV to $625K max loan amt Loans to 75% to $1.5M, 70% to $2M, 60% to $3M Non-Warrantable Condo and Condotel for Foreign Nationals OK!
  5. 5. • Non-Warrantable Condo: 75% LTV CondoTel: 70% LTV to $500K max loan amt• Non-Warrantable Condo and Condotel Vacation/Second Home w/ full kitchen only• Max DTI ratio is 40% w/12 Months PITI Required Liquid. 24 months if >$1M loan amt• Non-Warrantable Condo and Condotel Loan amounts up to $2M, 60% LTV• Low competitive Non-Warrantable Condo and Condotel conventional rates
  6. 6.  A NON-WARRANTABLE condo does not meet ANY ONE of these guidelines: ~ A Non-Warrantable Condo Is not: A condominium project with features that lenders view as favorable in terms of their risk exposure on loans secured by individual condo units. ~ A Non-Warrantable Condo Is not: A project that (including all common areas) is fully completed and the common areas are insured. ~ A Non-Warrantable Condo does not: Have the Homeowners Association controlled by unit owners (as opposed to the developer) for some period. ~ A Non-Warrantable Condo does not: Have most units are owner-occupied. ~ A Non-Warrantable Condo does not: Have one person who owns more than 10% of the units. Loans on units in warrantable condos receive better terms than loans on units in non-warrantable condos.
  7. 7.  Condotel (condo hotel, condo-tel, etc….not a Non-Warrantable Condo) projects funded up to 70% LTV nationwide, full documentation, 12 months PITI on all properties owned at close required, 680 min fico, rates start in the low 5s, 3/1, 5/1, 7/1, 30 and 15 year terms available. Condotel must have a full kitchen. No stated income. Foreign Nationals are ok up to 60% LTV higher case by case. Second home,vacation home only…no investment property. You can help us understand more about your needs by contacting us or submitting an Executive Summary.
  8. 8.  Non-Warrantable Condo and condotels are different. Condotels, aka condo hotel, is a newer idea involving a combination of a resort style hotels with condominium ownership. Originally this started to become popular after 2001, due to difficulty in arranging a real estate loan greater than 50% of the cost of purchase price. In order to arrange the appropriate financed amountl, property owners sold units to buyers and land loads, promising to let the units to guests for payment of profits to the owners. Recently this has become less ordinary with typical hotels, however it is till strong with resorts.

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