Non-Warrantable Condo Loan
March 15, 2019 — 2 min read
Alternative Advantages
Picture this: You���ve spent weeks searching, and finally found your dream condo. You put in an offer, it gets accepted, and you���re well on your way to blissful ownership. Then out of the blue, you get a call from your lender, saying something about your condo is ���non-warrantable��� so they can���t do the loan. What does that even mean?
A Non-Warrantable Condo means there are one or more characteristics to the condo project which cause it to be non-compliant to standard lending guidelines. Because of these characteristics, your standard lender typically would have to send you away because they couldn���t finance a loan on that condo.
Why would a condo be considered non-warrantable?
There are several reasons. Here are a few.
- The condo project has mandatory dues or membership fees for clubhouses or recreational facilities.
- There are non-incidental business operations owned/operated by the HOA, such as a restaurant, spa, or health club.
- The project is in litigation���either the HOA, project sponsor or developer are party to pending litigation.
- Over 40% of the total above and below grade square footage of the project building is commercial, non-residential, or mixed-use space.
- A single entity (individual, investor group, partnership, or corporation) owns up to 40% of the total units in the project.
Let���s go back to your scenario above. What are you supposed to do? If your lender is Pacific Residential Mortgage, you continue with your transaction uninterrupted, because we can finance non-warrantable condos! At PRM, as a part of our Alternate Advantage Program, we have a loan specifically dedicated to this type of condo. We can finance condos that have up to two of the above-listed characteristics.
ADDITIONAL PROGRAM DETAILS*
- Fixed and adjustable rates available
- Interest only option available
- Up to 90% Loan-to-value
- Loan amounts up to $2 million
- Full Doc, Bank Statement, Foreign National, and Asset Resource programs are eligible in combination with this program.
- Purchase or refinance
- Owner-Occupied, Second Home, and investment properties
Do you have questions about the Non-Warrantable Condo loan or any other home loan questions?
Contact us today!
*Requirements vary based on credit score, LTV, and loan purpose
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