Finance Your First Condo with Condo Loans in Fort Lauderdale, Florida Provided by FMSG
Owning a home, no matter what size is a bucket list goal for most people. However, buying a house is not an option for everyone looking to invest in real estate. This is why condominium ownership is a great alternative to homeownership.
This allows different people to jointly own a development’s common areas and facilities while having their dwelling places. Unfortunately, out-of-pocket financing for condos in Florida is not necessarily an option for all.
Mortgage financing in Fort Lauderdale offers a solution. Finding the right lender to finance your condo is crucial. The transaction can make all the difference between you having your place or not. It also considers all the caveats that are inherent to this type of property.
Florida State Mortgage Group, Inc. reviews credits, income, and assets along with conducting property analysis to determine your eligibility for receiving a condo loan in Fort Lauderdale, Florida.Owning a home, no matter what size is a bucket list goal for most people. However, buying a house is not an option for everyone looking to invest in real estate. This is why condominium ownership is a great alternative to homeownership.
This allows different people to jointly own a development’s common areas and facilities while having their dwelling places. Unfortunately, out-of-pocket financing for condos in Florida is not necessarily an option for all.
Mortgage financing in Fort Lauderdale offers a solution. Finding the right lender to finance your condo is crucial. The transaction can make all the difference between you having your place or not. It also considers all the caveats that are inherent to this type of property.
Florida State Mortgage Group, Inc. reviews credits, income, and assets along with conducting property analysis to determine your eligibility for receiving a condo loan in Fort Lauderdale, Florida.
FHA or VA Condo Loan in Fort Lauderdale
Historically, most people turn towards FHA and VA loans to take advantage of low down payment options offered by the related agencies.
VA loans, which are meant for US veterans and their families, allow borrowers to invest in a condo with no down payment. This is the reason why they are popular in Florida. FHA loans are offered by the Government, allowing people to buy condos at a lower price.
However, there are a handful of condo projects that are approved by FHA and VA. This means that you have to undertake a lengthy and costly procedure to get your condo project approved.
Conventional Condo Loans in Fort Lauderdale
Since the approval process for acquiring a VA or FHA loan is long, the bulk of condo financing is left to conventional condo loans in Fort Lauderdale and other Florida areas.
The project still has to pass a full review by underwriting before you can be awarded the loan. Financial institutions Fannie Mae and Freddie Mac are responsible for the underwriting for most conventional loans around the country.
What is a Warrantable Condo Loan?
The term “warrantable condo” refers to any condo development or condo complex that meets all condo financing requirements established by Fannie Mae and Freddie Mac. On the other hand, non-warrantable condos are those condo properties that don’t meet the set requirements. These are ineligible to be sold to Freddie Mac or Fannie Mae as they are riskier.
How Will I Know If a Condo is Warrantable?
Here are some of the components of a warrantable condo:
- Most condos in the project are occupied by owners or are second homes
- 15% or fewer condos are more than 30 days delinquent on HOA payments
- 10% or less are owned by a single individual or entity
- 20% of the project consists of non-residential space
- Established and existing condo projects should be 90% sold
- New and converted projects should have 70% units pre-sold
- At least 10% of the project budget should be designated in reserves
- The project should have adequate insurance coverage
- A full HOA budget review
What Are Limited Review and Full Review Condo Approvals?
Fannie Mae and Freddie Mac have created two categories of condo approvals. The Limited Condo Review refers to a program that is offered for loans that are low risk. Condos underwritten as limited are more likely to be approved. Based on that, full review condos are those that require much more detailed and vigorous underwriting.
What’s the minimum amount of down payment when
purchasing a condo in Fort Lauderdale?
The simple answer is 3%. Since most condo projects don’t seek FHA approval, they are left with the option of conventional condo loans in Fort Lauderdale. These loans come with a 3% down payment requirement for condo purchases.
Other down payment requirements include:
- 3% For first-time homebuyers
- 5% For non first-time homebuyers
- 10% On second home condos & jumbo condo loans
- 20% On non-warrantable condo loans
- 20% On investment property condo loans
Is the condominium association required to maintain reserve funds in their annual budget?
Yes, this is true when the borrower has less than 10% down payment. In the case of the borrower having at least a 10% down payment, an excellent credit score, and an allowable DTI, the association’s annual reserve funds will not be considered for primary and/or second purchases and/or refinances.
If the condominium project has a very high number of rentals, am I still able to obtain a mortgage loan?
Yes. However, the property should be intended to be used as your primary or second home. In this situation, the number of rental units versus owner-occupied units is not considered.
Are You Eligible for a Condo Loans in Fort Lauderdale?
To find out more details about your eligibility for condo loans in Fort Lauderdale and other Florida locations, talk to your FMSG loan officer today at (954) 359-3000 or click the button below to get started.
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