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Condo Certifications
September 17, 2014 — 2 min read
Since the housing bubble burst, tighter restrictions have been implemented on condo financing. Many lenders suffered their biggest losses from defaults on condominium loans. These restrictions include higher interest rates and lower approval rates. Above and beyond the financial situation of the borrower, lenders now verify that the condo association or HOA is financially sound as well.
Lenders follow guidelines set by FHA, Fannie Mae and Freddie Mac for condo project certifications. Be sure to check Hud.Gov's condominium lookup to make sure any condo you are listing or selling has an approval. Some project eligibility requirements are tightening as of August 31, 2014.
To qualify, condo projects must meet the following conditions:
- Over 50 percent of the units must be owner occupied
- No single investor may own more than ten percent of the units
- No more than 15 percent of owners may be delinquent on monthly dues
- All amenities must be completed if the development is more than 12 months old
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