What is a Non Warrantable Condo?

By
Mortgage and Lending with The Federal Savings Bank
http://actvra.in/ZLW

Non Warrantable Condos are not eligible to be sold to Fannie Mae or Freddie Mac because they DO NOT fit into one of the following three classes:

CLASS I

1. Developers control of the homeowners association has been turned over to the condo owners
2. Project is not subject to additional phasing or add-ons which have not yet been completed
3. All common elements and amenities must be fully installed, completed and in operation
4. 70% of all units in the entire development must have been sold and or legally obligated to close
5. 70% of all units in the entire development must have been sold to owner occupants

CLASS II

1. Recent or current condominium conversions (from apartments)
2. Homeowners association has been controlled by the unit owners (other than the developer) for less than two years
3. Project is not subject to phasing or add-ons which have not yet been completed
4. All common elements and amenities are fully installed, completed and in operation
5. 70% of the units in the entire development must have been sold and/or legally obligated to close
6. 70% of the units in the entire development must have been sold to owner occupants
7. No more than 15% of the current unit owners are more than one month delinquent in payment of homeowners dues or assessments

CLASS III

1. Homeowners Association has been controlled by unit owners (other than developer) for at least one year
2. Project is not subject to phasing or add-ons
3. All common amenities are fully installed, completed, and in operation
4. 90% of the units have been sold (owner-occupancy of at least 60%)

A CONDO QUESTIONNAIRE MUST BE COMPLETED BY THE MANAGEMENT TO DETERMINE PROJECT ELIGIBILITY

Because FNMA would not purchase mortgages secured by non-warrantable condominiums, many banks consider these condos to be more risky, and thus increase the interest rate accordingly.

Depending on the loan program you select, be prepared to have a down payment on the home. Most lenders will only offer low Loan-to-Value financing on non-warrantable condos.

 www.MortgageAdvisor.info & www.GregZaccagni.com

Related articles:

FHA Spot Approval Requirements for Condominiums

Georgetown Study finds Mortgage Brokers have a lower average APR than banks!

 

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  1. tami champagne 11/03/2010 04:54 PM
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Topic:
Lending / Financial
Location:
Illinois
Groups:
Mortgage Solutions
New Home Construction Selling Information
WEIRD LOAN AND COMMERCIAL MORTGAGE FORUM
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Tags:
condo questionnaire
greg zaccagni
non warrantable
homeowers association
common elememts

Comments 11 New Comment

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Ambassador
448,276
Paul McFadden
Janitorial. Kent, WA.
Environment Control

Thanks, Greg. The other issue these days is mortgage insurance. A lot of companies will not insure non-warrentable condo's. Period. End of statement.

 

Paul

July 04, 2008 03:51 PM
Rainer
191,863
Jeff Payne
Panama City Real Estate
The Payne Group at Keller Williams Success Realty

Oh No, not the condo-tel thing again.  Here in Panama City Beach, that condo questionaire can cause big problems if the wrong person fills it out.

July 05, 2008 09:27 PM
Rainmaker
70,078
John Jones
Texas Urban Living Real Estate

sometimes even getting one person who knows the right answers to fill out the questionnaire can be a challenge.

October 21, 2008 04:57 PM
Anonymous #4
Anonymous
John Donnal

what is the difference between a non-warrantable vs warrantable

August 20, 2009 09:23 AM
Rainer
20,382
Grant Hammond
Nashville Homes
Metropolitan Brokers, LLC

This is an extremely valuable post. Many condo owners in Nashville had no idea that their condo was non warrantable and therefore, non-sellable until now. That has certainly led to lower condo prices.

February 23, 2011 05:11 PM
Anonymous #6
Anonymous
Nemo Baker

we Do non- warrantable condos all day long down to 10k 97% ltv

214-861-0666

June 16, 2011 04:18 AM
Anonymous #7
Anonymous
BRI BRI KAPLAN

I AM A LOAN OFFICER WHO CAN DO CONDOS, CO-OPS AND 1-4 FAMILY MIXED USE WITH ONLY 55 DOWN PAYMENT

July 05, 2011 06:48 PM
Rainer
4,706
David Marks
Finance One Asset Management (info@finance1online.com)

We can fund non-warrabtable condos nationwide with great rates up to 80% LTV.

 

David Marks

888-814-8406

August 29, 2011 07:34 PM
Anonymous #9
Anonymous
Bryan Horn

Great Post.

Home Bank lends to non-warrantable condos in the state of California.  Contact me at 858-270-5881 x240 or bhorn@homebankofcalifornia.com

or apply at http://homebankofcalifornia.com/

 

September 23, 2011 02:25 PM
Anonymous #10
Anonymous
Hopet Farquervlw

Most lenders will want a condo to be warrantable to Fannie or Freddie so that the loan can be sold to Fannie or Freddie, especially now that most banks and mortgage lenders are only selling to Fannie Mae and Freddie Mac.

http://www.finance1online.com/unique-loan-programs/condo-finance/non-warrantable-condo-2/
December 26, 2012 05:37 AM
Anonymous #11
Anonymous
Mark Ray - Rabobank

Rabobank is a leader in non warrantable condo financing in California. Our portfolio is robust, can solve your financing challenges. Call for more information.. 916 225-5626 nmls 259741

July 07, 2014 01:41 PM
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Rainer
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Greg Zaccagni

Illinois Mortgage Lender
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