2022 Changes in Condominium Financing for Conventional Loans & Alternatives | mortgage education

#condos #condominiums #conventional

Hey everybody derek bison here and today’s topic we’re going to be talking about some big changes in condominium financing through fannie mae and freddie mac so if you’re thinking about coming to florida and buying a condominium here you’re gonna definitely need to pay attention because this may actually affect you in this video we’re going to be covering the following

Topics what’s changed how the change could affect your transaction and we’ll cover some alternatives let’s get started all right so the big change here has to do with conventional financing that’s financing that is backed by fannie mae and freddie mac so if you’re looking to get a conventional loan to finance a condominium this is where things are going to get

Different so effective january 1st 2022 the new rules are going to go into effect and many lenders like us have already implemented the change the change has to do with how the condominium qualifies for the loan when you’re buying a condominium you would expect that you would have to qualify for the loan but when it’s a condominium you have that step of course but

Also the condominium itself also has to pass a rigorous review in the past there have been two types of reviews they’re called the limited review and a full review now the limited review was just a two to four page questionnaire that the lender sends to the condominium during the process and they fill it out and the lender just takes the answers at face value

And makes a decision on whether or not that meets the criteria for approval with a full review the condominium has to provide copies of all their bylaws their books their budget their minutes everything and it gets reviewed by the lender it’s a much more comprehensive process again the limited review used to be two to four to five pages versus hundreds or even

Thousands of pages that have to be reviewed by the lender so in the past if a buyer had a 25 down payment or could do a 75 percent loan with a home equity line of credit and a 10 down payment the buyer would be eligible to buy the condo with a limited review and this is what’s changed the limited review is now off the table regardless of the buyer’s down payment

The condominium now has to pass that rigorous review of all the documents all right so what does this mean to you if you’re out there trying to look for condominiums well here’s what you can expect higher qualification standards longer wait times and potentially increased buyer cost since the review process went from just reviewing a few pages on a questionnaire to

Having to review hundreds or even thousands of pages of documents and spreadsheets and it may potentially lead to more condo loan denials especially if the condominium can’t pass the standards of a full review but guess what it’s not all bad news when you’re buying a condominium you really need to know what it is you’re buying and a limited review doesn’t always

Tell you that what’s the first thing you do when you go buy a house as soon as you go under contract you get a home inspection exactly so a home inspection is your eyes and ears a professional assessment of the quality and the condition of the home you’re looking to purchase think of the full review much like a home inspection of the condominium that way you know

If it’s being managed correctly or mismanaged or if there’s deferred maintenance coming down the line or other types of critical issues that could financially impact your decision when you’re buying a home as with anything else you want to know the good the bad the ugly so that you can make an informed decision and now here are some alternatives if you’re in the

Middle of a transaction where you’re trying to buy a condominium and the condominium is just not passing that full review for whatever reason maybe it’s just missing the mark by a couple of little things but you still want to continue we have some great alternatives and one of them is our private client portfolio program i’ll include a link in the description below

But we also have some other great non-qm or non-qualified mortgage options as well and if you’re self-employed and you need like a bank statement loan we can do these on condominiums as well but those are just the tip of the iceberg of some of the things we can offer you so if this is in your wheelhouse meaning buying a condominium or looking to buy one or you’re

Already under contract and you want to discuss your scenario with us head over to unconventional lending.com or give us a call and i’ll include the telephone number in the link below and that’s it we hope you found this condo update informative and if you’re looking for more mortgage related content consider subscribing to the channel we would love to have you

And as always if you’re looking to purchase refinance or get pre-approved to purchase a home in the greater tampa bay area any of its surrounding communities or just really anywhere in the state of florida we would love the opportunity to assist you thanks again for watching i’m derek bisson and this is unconventional lightning

Transcribed from video
2022 Changes in Condominium Financing for Conventional Loans & Alternatives | mortgage education By Derek Bissen