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3. Non Warrantable Condo & Codotel Loans
When Fannie Mae or Freddie Mac determine a
condo project isn’t eligible under their
guidelines the project is called a
4.
5. The project does not fit the three Fannie Mae or
Freddie Mac class guidelines. Banks typically do not
like to lend on condominiums in non warrantable
condo projects because they cannot be insured and
cannot be sold off to an investor. The only lenders
who will lend on a non warrantable condo project is a
portfolio lender.
Non warrantable condo portfolio lenders lend their
own money and hold the loan for servicing in their
“portfolio” of loans. Non warrantable condo porfolio
lenders tend to lend on riskier real estate
transactions and give higher rates due to the risk.
Yes…this means a non warrantable condo and
condotel typically have higher rates.
6. Nationwide Non-Warrantable Condo and condotel
Lending
Purchase, R&T and C/O Refinance
Full Documentation Only
680 FICO Minimum
Fixed 30 & 15; ARM: 3/1, 5/1, 7/1
80% LTV to $625K max loan amt
Loans to 75% to $1.5M, 70% to $2M, 60% to $3M
Non-Warrantable Condo and Condotel for Foreign
Nationals OK!
7. • Non-Warrantable Condo: 75% LTV CondoTel: 70%
LTV to $500K max loan amt
• Non-Warrantable Condo and Condotel
Vacation/Second Home w/ full kitchen only
• Max DTI ratio is 40% w/12 Months PITI Required
Liquid. 24 months if >$1M loan amt
• Non-Warrantable Condo and Condotel Loan
amounts up to $2M, 60% LTV
• Low competitive Non-Warrantable Condo and
Condotel conventional rates
8. A NON-WARRANTABLE condo does not meet ANY ONE of these
guidelines:
~ A Non-Warrantable Condo Is not: A condominium project with
features that lenders view as favorable in terms of their risk
exposure on loans secured by individual condo units.
~ A Non-Warrantable Condo Is not: A project that (including all
common areas) is fully completed and the common areas are
insured.
~ A Non-Warrantable Condo does not: Have the Homeowners
Association controlled by unit owners (as opposed to the
developer) for some period.
~ A Non-Warrantable Condo does not: Have most units are
owner-occupied.
~ A Non-Warrantable Condo does not: Have one person who
owns more than 10% of the units.
Loans on units in warrantable condos receive better terms than
loans on units in non-warrantable condos.
9. Condotel (condo hotel, condo-tel, etc….not a
Non-Warrantable Condo) projects funded up to
70% LTV nationwide, full documentation, 12
months PITI on all properties owned at close
required, 680 min fico, rates start in the low 5s,
3/1, 5/1, 7/1, 30 and 15 year terms available.
Condotel must have a full kitchen. No stated
income. Foreign Nationals are ok up to 60% LTV
higher case by case. Second home,vacation home
only…no investment property. You can help us
understand more about your needs by contacting
us or submitting an Executive Summary.
10. Non-Warrantable Condo and condotels are
different. Condotels, aka condo hotel, is a newer
idea involving a combination of a resort style
hotels with condominium ownership. Originally
this started to become popular after 2001, due to
difficulty in arranging a real estate loan greater
than 50% of the cost of purchase price. In order
to arrange the appropriate financed amountl,
property owners sold units to buyers and land
loads, promising to let the units to guests for
payment of profits to the owners. Recently this
has become less ordinary with typical hotels,
however it is till strong with resorts.
