How to Finance Condos
In the past 2 years there have been many changes to the criteria that banks and lenders are using to evaluate condominium buildings before they agree to loan on them. Many sellers of condo units are unaware of these changes until they go to sell their condo and find out it cannot be financed using FHA or Conventional loans. When this happens, the buyer pool for that condo shrinks and the sales price falls.
One of our WPP Realtors has written a post aimed at educating HOA’s and Condo owners about the things they can do to improve the ability of their units to be financed,
The majority of loans closing today are backed by FHA- which means in order for the majority of buyers to be able to buy in your building your condos need to meet their standards. The big three to focus on are:
- Make sure that the condos in your building are 50% or more owner occupied.
- No more than 15% of owners can be behind/delinquent on their HOA dues.
- No one owner can own more than 10% of the units in the building.
From “How to Keep Your Condo Financeable” -GetRealTacoma.com
Many of these tips focus on applying for and keeping your FHA Certification and qualifying for conventional financing. The article does not go into detail on portfolio or private lending, but focuses on some of the main things a Condo owner should be checking on before they go to list their condo. If you have questions about what you need to do to prepare your condo for sale, contact us!