Here we will study what is a warrantable condo? As well as its New Rules and what is non warrantable condo? As well as how can you know if the condo is warrantable with features of a warrantable condo as well. We will also know the warrantable condo list or FHA condo list. But, before understanding What is a warrantable condo? You should first know the meaning of condo or What is condo? So, let us see its meaning first.
What is a condo?
Condo refers to any unit which is a part of a condo project. Where, condo project refers to real estate used for the residential purpose where individual owns a certain unit, and the unit owners have some interest in the areas which are owned or detained by an owner’s association.
So, condo homes are considered a good option as they provide home ownership to people, which proves to be an affordable option.
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What is a warrantable condo?
A warrantable condo is the one where 51% or more of the condo owners have to live in the condo complex. So, the homebuyer can finance the condo project with the help of a conventional mortgage under some set of guidelines, which are framed by the Fannie Mae and Freddie Mac known to be the government-sponsored enterprises.
Though, the following requirements should be met by the Warrantable condos which are related to their ownership and governance. As:
- the annual budget must go to reserves which should be at least 10 %
- the units must be owner-occupied which should be at least half of all.
Warrantable condo mortgage loans qualifications:
Here we mention some of the requirements or qualifications that must be fulfilled to get the Warrantable condo mortgage loans, which are as follows:
- Minimum 20 % down payment
- Minimum credit score of 680
- Minimum loan size of $ 100,000
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Why is a condo non Warrantable?
A non Warrantable condo is the one that does not meet all the requirements mentioned by the Fannie Mae or Freddie Mac’s. Where, if any of the one requirement is not fulfilled then it becomes a non warrantable condo.
So, a non warrantable condo has the following features as follows:
- Comprise of manufactured homes.
- Require membership, such as a golf club or country club.
- Operate as a hotel or motel, also known as a condotel.
- Be part of a continuing care facility.
- more than two units in a development are owned by a single person or an individual.
- Be a party to a lawsuit.
- 20 % of all the units in a project are owned by a single person or an individual.
- There is more than 35 % of the non-residential or commercial space in the project.
- owner or developer of the building is involved in litigation
How to find out if a condo is warrantable?
The realtor, lender, and condo’s management office can tell you if your condo is warrantable or not as they possess the resources which can help them to determine if a condo is warrantable or non warrantable.
You can also check this on your own by going on the website or the database of the Department of Housing and Urban Development for whichever you want to know the details as FHA or VA approved condos, where you just need to enter some details like name of the condo, location, or status.
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Warrantable condo list:
The warrantable condo list is the FHA condo list that lists down all the FHA guidelines and FHA rules that should be met to be considered as a warrantable condo, which are as follows:
- The development should be complete
- The growth should not be used for commercial purposes
- One person should not possess a majority of the units
- The units aren’t used as condotels
- The connotation’s finances are in good order
- The connotation has a good budget
- There should not be any litigation against the development or the association
Frequently Asked Questions
How do you know if a condo is warrantable?
You can also check this on your own by going on the website or the database of the Department of Housing and Urban Development for whichever you want to know the details as FHA or VA approved condos, where you just need to enter some details as the name of condo, location, or status.
What does it mean if a property is warrantable?
A project is said to be warrantable if it follows the rules and guidelines of Fannie Mae and Freddie Mac, which tells us about the condominium projects and properties against which mortgage is allowable.
Why is a condo non Warrantable?
A non Warrantable condo is the one that does not meet all the requirements mentioned by the Fannie Mae or Freddie Mac’s. Where, if any of the one requirement is not fulfilled then it becomes non warrantable condo.
Can you get a conventional loan on a condo?
Yes, you can get a conventional loan on a condo if the condominium meets requirements with the help of which buyer can purchase the units.
What Is A Limited Review Condo?
A Limited Condo Review is a streamlined program offered by Fannie Mae & Freddie Mac for loans categorized as lower risk. Condominiums underwritten under the Limited Review program are several times MORE LIKELY TO BE APPROVED than those submitted under the Full Review program.
Which Of The Following Must Apply For A Condo To Be Considered Warrantable Eligible?
For a condominium complex to be considered “Warrantable,” it generally must meet the following requirements: Most of the units are owner occupied or second homes; not investment properties. 15% or less of the units can be 30 days delinquent on HOA dues. No more than 10% of a project can be owned by a single entity.
Thus, by now you know what is a warrantable condo? As well as its New Rules and what is non warrantable condo? As well as how can you know if the condo is warrantable with features of the warrantable condo as well. We also know by now, the warrantable condo list or FHA condo list. Thus, we successfully explained what is a warrantable condo?