Condominiums are a great option for home buyers who want their own space, but don’t necessarily want the upkeep of a yard or other responsibilities associated with a single-family home.
What Is a Non-Warrantable Condo?
A warrantable condo is financed through a traditional home mortgage loan. Most of the time, easy-to-sell condos fall under warrantable loans and operate like buying a single-family home.
There are, however, always outliers to home buying.
Non-warrantable condos are ineligible to be sold to FHA, Freddie Mac, or Fannie Mae. Because of this, mortgage financing is too risky for most traditional home loans, making lenders reluctant to grant this type of loan for these properties.
Since there’s a greater risk in purchasing a non-warrantable condo, a larger down payment and higher interest rates are common. Additionally, non-warrantable condos are also harder to sell if you ever want to leave the residence.
View Our Blog: What Is a Cash Out Refinance Loan?
What Types of Condos Are Considered Non-Warrantable?
- Requires membership such as a gold or country club
- Operates mainly as a hotel or motel
- Underneath a current lawsuit
- More than 25% of the space is used for commercial purposes
- Allows a single person or business to own 20% of all units in a project for 21 units and up
- Features more than 15% of units in the condo 60 days or more delinquent on their HOA dues
View Our Blog: Best Neighborhoods to Buy Real Estate in Los Angeles
What Is the Best Way to Get a Non-Warrantable Condo Loan?
Your best option for a non-warrantable condo loan is with a trusted lender specialized in a variety of specialty loans like non-warrantable condo loans.
Park Place Finance offers a variety of traditional and hard money loans with competitive interest rates and fast closing times, so you can move to the next chapter in your life.
Call us today at (866) 407-1599 to find the best option for your individual financial situation.