Financing the condo you have in mind.
With a condo you are buying into a whole community, so the lender looks at the building and the HOA as well as you. Theresa can help you understand what that means before you make an offer.
A mortgage for a unit in a shared community
A condo loan is a mortgage used to buy a condominium unit. You own your unit, and you share ownership of common areas such as hallways, roofs, grounds and amenities with the other owners through a homeowners association (HOA).
Because of that shared ownership, lenders generally review the condo project itself, including its finances, insurance and how many units are owner-occupied, as well as reviewing your own credit, income and down payment.
Depending on the project and your situation, condos may be financed with conventional, FHA, VA or jumbo loans. Each program has its own condo requirements.
Programs that may fit a condo
Which one fits depends on the building, the price and your plans. Theresa will compare them side by side with you.
Conventional
A common route for condos, including second homes and some investment units. Learn more
FHA
May allow a lower down payment, if the condo project meets FHA requirements. Learn more
VA
For eligible veterans and service members, where the condo project meets VA requirements. Learn more
What lenders look at in a condo
Some condos are easier to finance than others. Knowing what gets reviewed helps you avoid surprises.
- HOA dues. Monthly dues count toward your total housing payment when you qualify.
- The HOA's finances. Lenders may review the budget, reserves and how many owners are behind on dues.
- Owner-occupancy. The share of units lived in by owners, rather than rented, can matter.
- Insurance. The building's master policy, plus your own coverage for the inside of your unit.
- Project approval. FHA and VA loans generally require the condo project to be approved for that program.
Frequently asked
Is it harder to get a mortgage on a condo?
Not necessarily, but there are extra steps. Along with reviewing you, the lender reviews the condo project. A well-run building with healthy finances usually makes the process smoother.
Do HOA dues affect how much I can borrow?
Yes. HOA dues are added to your monthly housing costs when lenders work out what you may qualify for, so higher dues can lower your buying power.
Can I use an FHA or VA loan on a condo?
Potentially. The condo project generally needs to meet that program's approval requirements. Theresa can help check before you commit to a unit. See FHA loans and VA loans.
What is a "warrantable" condo?
It is a condo project that meets the standard guidelines for conventional financing. Projects that don't meet them may need a different loan option, so it is worth finding out early.
Can I buy a condo as a second home or rental?
Often, yes. Requirements differ for second homes and investment properties, including down payment and occupancy rules. Talk to Theresa about your plans.
Ask the Huntress
Send Theresa the condo you are considering and your plans, and she'll walk you through which loan options may fit, and what the building review will involve.
(913) 705-0049