Non Warrantable Condo Financing

It's no secret that condominiums are popular with many homeowners. For first-time homebuyers, they can be an alternative to buying a single-family home. For seniors and empty nesters, they can offer the advantages of homeownership without the worry of many property maintenance concerns.

Whether your customers are shopping for the right condo or you've already found it for them, I can help you make it “A DONE DEAL” with a variety of financing options that can be tailored to fit your buyer’s lifestyle and financial goals.

With lending capabilities throughout the state of Florida, we're experienced at providing financing for all kinds of condos:

New Construction and Conversions

Non-Warrantable Condos

Condo Hotels

Low/High-rises

If you're not sure what price range fits within your buyer’s budget, one of our home mortgage consultants can work with you to determine a preapproved price range to help you shop more confidently. Contact us today for a financing solution that serves your Buyer’s immediate needs and can promote long-term financial security.


Debra C. Ferguson
Lic. Mortgage Broker
727-490-5783
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About the Mortgage Professional

Debra C. Ferguson
Licensed Mortgage Broker
727.867.6819 Phone
888-274-3582 Fax
Debraf@usa.net

I would like to introduce myself and give you a little bit of history of what I have to offer in the Real Estate Finance Industry.

I have been associated with the Real Estate Industry for over 30 years. My father was a builder and developer on the Pinellas Beaches in the 1970’s and 80’s. I have been in the Mortgage Industry for over 15 years. I have lived in my home in Maximo Moorings since 1978. I built my business through referrals because my number one priority is Service and Knowledge. I receive Borrowers from many sources including Realtors because I pride myself on having a smooth transaction with all parties involved. I keep Realtors updated on what is happening with the loan so everyone feels comfortable the closing will be smooth. I have extensive knowledge on underwriting guidelines so there is nothing left to chance when the loan is submitted.

I am available to Realtors and Clients 7 days a week and usually until 9pm every evening. I have the ability to pre qualify borrowers within 15 minutes and fax a pre qualification letter within minutes. I can get a Fannie Mae Underwriting approval within 30 minutes after speaking with borrowers and taking a full application. I know how to properly package and present the loan documents to the bank for fast and easy approvals. I eliminate delays by analyzing all the components of what it takes to get a loan to closing and I'm aware of any stipulations that could possibly arise. Communication and proper planning is the key to a successful Real Estate closing.

I have all types of financing available including FHA, VA and Conventional. I have the ability to offer financing on Condo Hotel Units and Condo’s because of a relationship with a Reputable Bank that I have had for several years. There is No Condo Questionnaire Required at this time and Condo’s do not have to be Fannie Mae Approved to obtain financing. I can offer 100% LTV Investor Financing with Cross Collateralization on a primary or second home.

Thank You for your time and please feel free to call me if there is anything I can assist you with or questions I can answer.

Sincerely,

Debra C. Ferguson / Licensed Mortgage Broker

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About Fannie Mae Condo Approvals

Why is it so difficult to obtain financing for Condo's and Condo Hotel Units with Fannie Mae and Freddie Mac ?

Requirements for Attached Condominium Projects in Florida


There are currently excessive unsold inventories of condominium project units in Florida resulting from the increase in building new condominium projects and the conversion of apartments to condominium ownership that occurred during the last several years. The increase in the number of units available is one of the factors that caused home prices toreach historical lows, particularly in the condominium market. As part of an ongoing review of business activities, Fannie Mae assessed the performance of mortgage loans secured by condominiums located in Florida and found that the number of loans currently delinquent or in default is at an all time high. As a result, Fannie Mae is modifying some of the terms under mortgage loans secured by attached units in condominium projects located in Florida will be accepted.

Clarification of Owner-Occupancy Ratio Requirements

Fannie Mae requires that established condominium projects consisting of attached units have an owner-occupancy ratio of at least 51 percent at the time the loan is originated(purchase or refinance) if the mortgage loan being delivered is secured by an investment property. Established projects where borrowers will occupy the unit or use the unit as asecond home are not subject to any owner-occupancy ratios.

Due to current market conditions, many condominium projects are experiencing higher numbers of financial institution- owned REO units, which many lenders may be countingas non-owner-occupied under Fannie Mae’s current requirements. Fannie Mae is clarifying its condominium project owner-occupancy ratio policy to include REO units that are for sale (not rented) as owner-occupied units in the owner occupancy ratio.

Projects where a borrower is an investor and the project does not meet the owner occupied ratio of 51 percent will only be eligible if the lender submits the project to Fannie Mae for review under PERS and the project is approved or as a single-loan project eligibility waiver and Fannie Mae approves the waiver based on its review of the overall risk of the project.

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Non Warrantable Condo Financing Available

What is a Warrantable Condo?

Fannie Mae has specific guidelines on what makes a condo warrantable.

The requirements of warrantability include these typical benefits:

• The condominium project (including common areas) is fully completed and the common areas are insured.
• The HOA Association is controlled by unit owners (as opposed to developer controlled).
• Most of the units are owner-occupied (non-rentals or investors), and no one person owns more than 10% of the units.

What is a Non Warrantable Condo?

• Developers are still in control of the homeowners association
• All common elements and amenities are not fully installed, completed and in operation
• More 30% of all units in the entire development have not been sold and or legally obligated to close
• More 30% of all units in the entire development have been sold to non owner occupants
• Recent or current condominium conversions (from apartments)
• Project is subject to phasing or add-ons which have not yet been completed
• More than 15% of the current unit owners are more than one month delinquent in payments of homeowners dues or assessments
• Condo’s that are classified as Condo Hotels

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Non Warrantable Condo’s require a Portfolio Lending Product

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I am a Licensed Mortgage Professional that has an established long term relationship with reputable Banks that lend money in Non Warrantable Condominium Projects.

NO CONDO QUESTIONAIRE REQUIRED

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Condo Hotel Financing

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Condo Hotels are a new trend in second home and investment
ownership. Buyers can purchase a luxury vacation home at a
world class resort and receive rent revenue whenever they are
not using their residence, helping to offset the costs of
ownership.



What Defines a Condo Hotel?

* Condos that allow rental desk, daily maid service, &/or restaurant.
* Condos that allow Daily Rentals even if their is not an on site rental

desk.

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Non Warrantable Condo’s require a Portfolio Lending Product

I am a Licensed Mortgage Professional that has an established long term relationship with reputable Banks that lend money in Non Warrantable Condominium Projects.

NO CONDO QUESTIONAIRE REQUIRED

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Homebuying

Choosing a Real Estate Agent :

Demand Experience

Look for Commitment

Consider Education

Conduct Interwiews

Making a Decision

Lending Guidelines

NON-WARRANTABLE CONDO LOAN PROGRAM
(No Condo Questionaire Required)



Condo Hotel Description

Condo Hotels are a new trend in second home and investment
ownership. Buyers can purchase a luxury vacation home at a
world class resort and receive rent revenue whenever they are
not using their residence, helping to offset the costs of
ownership.




Exceptable Property Types

• Condos that allow rental desk, daily maid service, &/or restaurant.
• Apartment Conversions with Full Size Kitchen over 950 Sq. Ft.
• Minimum Kitchen Requirements are enforced:
  Full Size Refrigerator, Stove/Oven, and Sink; Microwave recommended, but Optional.
  
  
  Loan Programs
  
• Easy Express 3/3, 5/5, 10/5 or 15 yr Fixed Rate Program.
• Margin = 2.00
• Caps: Lifetime Cap of 6
• Index: FNMA Required Net Yield for 30 yr Fixed Rate Loans
• Min. Credit Score = 680 for Primary and 2nd Homes; 710 for Investment Property.
  
  ******** Or *********
  
• Easy Express 3/1 or 5/1 ARM Interest Only Program
• Margin = 2.25
• Caps: 2/6 (3/1 ARM) or 5/2/5 (5/1 ARM)
• Index: 1 Yr Libor
• Min. Credit Score = 710 to qualify for Interest Only Program
  
  
  Underwriting & Program Parameters
  
• FULL DOC with No Prepayment Penalty
• VERIFY ALL ASSETS, BOTH LIQUID AND RETIREMENT.
• Financial Strength is Key in Underwriting.
  
• LTV is limited to 60% LTV (55% LTV in declining markets) if any of the following apply:
  *Unit is Less than 750 Square Feet
  *Unit Doesn’t Contain a Full Kitchen (Full Size Stove/Oven, Refrigerator, & Sink)
  
• LTV can be raised from 60% up to 100% if:
  *The Cross Collateralization Program is utilized with a 1st or 2nd Lien against the Applicant’s Primary Home.
  
• If Condo Received C.O. 1/1/2007 to present date, Max. LTV = 75%.
  
  
  Primary & 2nd Homes
  
• Max. Term = 30 years
• 100% LTV with Cross Collateralization
• 80% LTV with NO MI for Credit Scores 710 and higher; 70% LTV for Scores 680 to 709.
  
• All Refinances are Limited to 70% LTV.
  
  
  ***If property is located in FLORIDA or a Resort AREA, take 5% off for declining Markets.***
  
  Investment Property
  (Purchase or Rate/Term Refinance Only)
  
• Max. Term = 15 years unless Equity is $50K or more, the term = 20 years.
• Max. LTV = 70% or 100% LTV with NO MI with Cross Collateralization of a 1st or 2nd Lien against Borrower’s Primary Home or 2nd Home and Possible Amortization of 30 Years.
  
  
  New Condo Complexes Require Inspection and a Spreadsheet of the Following:
  
• Original Contract Date of all Units,
• Square Footage of all Units,
• Original Contract Price per Unit,
• Closing Date or Estimated Closing Date Per Unit.
  
• 40% of Complex must be Closed or Pending to Close Before Our Unit is Closed.
  
• Maximum Complex Penetration is 10%. That is, we will normally only finance up to 10% of the units.
  
  
  INELIGIBLE PROPERTY TYPES
  
• Properties managed by a National Hotel Chain (such as Hilton, Westin, etc.)
• If the Unit is Required to Participate in a Rental Pool.
• If the Developer is still in CONTROL of the Homeowner’s Association.

(Exceptions will be considered if Low LTV (50% or less) or if additional collateral is provided.)


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Home Equity Loans

Home Equity Line of Credit

If you need to borrow money to pay off debts or make a major purchase, a home equity line of credit (HELOC) can be useful. A HELOC is a form of revolving credit secured by the equity in your home. This is an open ended loan that can be paid down or charged up for the term of the loan, much like a credit card. The interest rate fluctuates (typically monthly).

With a HELOC, your lender will approve you for a specific amount of credit - the maximum amount you may borrow at any one time under the plan. In determining your credit limit, your income, debts, credit history and other financial obligations will be reviewed. An appraisal will be required on your home to determine the home's market value. Your credit limit will be based on a percentage of your home's appraised value, which is then subtracted from the balance owed on your existing mortgage.

When you take out a HELOC, you pay for many of the same expenses as when you financed your original mortgage, such as an application fee, title search, appraisal, attorneys' fees, and points (a percentage of the amount you borrow).

Most HELOCs have a fixed period (5, 10, even 20 years) during which you can borrow money. Typically, you will use special checks or a credit card to draw on your line. You will be required to make a minimum payment each month – usually the interest that accrued during the draw period. However, the interest you pay is usually tax deductible. At the end of your "draw period," you will be required to pay off the loan, making monthly payments on the principal and interest.

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