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Unwarranted condo complexes - financing options
Posted on 4/30/13 at 11:37 am
Posted on 4/30/13 at 11:37 am
Ok, so my wife and I put an offer on a condo and got initial approval on a 5% down 30 year loan, but today we found out that the original builder still owns 25% of the units so it won't qualify for a conventional loan, and our lender dropped us.
Is it even worth pursuing further at this point? I made some calls to some other lenders and I'm waiting to hear back.. hopefully looking for another loan with similar terms without this one restriction (the building qualifies on all other points).
Is it even worth pursuing further at this point? I made some calls to some other lenders and I'm waiting to hear back.. hopefully looking for another loan with similar terms without this one restriction (the building qualifies on all other points).
3
Posted on 4/30/13 at 12:10 pm to baytiger
Is the building FHA approved?
Posted on 4/30/13 at 12:49 pm to VABuckeye
This may be an option with a local bank. It depends different factors than conventional financing, but usually a local bank can do it on short term loan, then the demographics may change and it can be approved.
Posted on 4/30/13 at 1:02 pm to baytiger
I closed on the same exact type in September. Nobody national will touch you, you would need to finance through either a small homestead or credit union. I got a 30 yr at 3.9% variable. It sucked to do but it was a freddie mac foreclosure I got dirt cheap so I figured it would be worth it.
Keep in mind that it is best to buy if you plan on using it as a rental one day or you are a patient seller- anyone else will have the same trouble financing that you are having.
ETA: You might want to let your offer expire during inspection and negotiate a lower offer price based on this new knowledge. Tell the seller that it is difficult to finance the property and your rate is going to be higher because of this. If they have any sense they will realize you are being reasonable.
Keep in mind that it is best to buy if you plan on using it as a rental one day or you are a patient seller- anyone else will have the same trouble financing that you are having.
ETA: You might want to let your offer expire during inspection and negotiate a lower offer price based on this new knowledge. Tell the seller that it is difficult to finance the property and your rate is going to be higher because of this. If they have any sense they will realize you are being reasonable.
This post was edited on 4/30/13 at 1:05 pm
Posted on 4/30/13 at 1:13 pm to baytiger
run away quickly. no bank will touch a unwarranted condo..a credit union might do an adjustable balloon loan but unwarranted condo's are a big problem with fannie and freddie.
Posted on 4/30/13 at 1:21 pm to hawkeye007
Dude, I got a 30 yr 3.9% adjustable- it isn't that bad. I'm fixed for 7 years, at that point if it goes up, I can either pay it off (will be a rental by then- not planning on living there long term) or sell for way more than the foreclosure price I paid.
Not saying it is definitely a good deal for him but depending on how cheap it is compared to what it is worth or if he plans on using it as a rental property, it still might be a decent deal.
Not saying it is definitely a good deal for him but depending on how cheap it is compared to what it is worth or if he plans on using it as a rental property, it still might be a decent deal.
Posted on 4/30/13 at 1:32 pm to Crbello4Hiceman
you got a good deal for your situation. if the condo was cheap enough i think a 7/1 arm is a good product.
Posted on 4/30/13 at 2:26 pm to VABuckeye
quote:no. one entity owns 25% of the units; that's the only thing preventing approval to my knowledge.
Is the building FHA approved?
I think that entity is the original builder.. and two other condos are currently under option which would make it less than 20% once those are purchased. FHA requires that no one entity owns more than 10% of the units in the complex.
edit: right now I've got two lenders trying to get me some financing.. if I can't secure it by friday I think I'll have to let this place go... which would annoy me a bit as I think it's quite a good deal in a location that's poised to increase in value a lot in the next 3-5 years.. especially if the building becomes FHA approved in that period.
This post was edited on 4/30/13 at 2:29 pm
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