What to Know about Buying a Condo
We are often asked if taking out a loan to buy a condo unit is any different than borrowing to buy a house. While we know many homeowners who have mortgages on condominiums, there are a couple important aspects to consider when financing a loan for a condo. We’re going to discuss how your loan to value (LTV), and type of review will play an integral part of getting a loan. If you’re buying a condo, you need to consider whether the project review will make any difference in your LTV, and vice versa. The two types of approval are a limited review and a full review.
Approved Condo Associations
Some condos are already approved and ready for financing. No additional steps are needed in the mortgage process. Use the links below to see which associations have an ACTIVE Approval status:
Conventional Loans: Fannie Mae Approved Condo List
FHA Loans: HUD Approved Condo List
VA Loans: VA Approved Condo List
Getting a full review approval usually allows the homebuyer to finance up to 95% – 97% of the LTV if the condo will be owner occupied, up to 90% of the LTV if it’s a secondary home, and up to 80% of the LTV if the condo is an investment property. The full review can have anywhere between 25-60 questions and requires much more supporting documentation.
Remember that not only is the individual unit underwritten, but also the entire project gets analyzed, which can cause delays in the loan process.
Putting 10% down usually allows you to have a limited review if it’s an owner occupied condo. But that doesn’t guarantee that the project is eligible for limited review. New condo projects, which may have ineligibility issues, could change it to a full condo project review. The limited review has 10 yes or no questions. The questionnaire states that if the answer is NO the property is not eligible for a limited review.