So you have found the perfect condo, and now you just need financing. Who qualifies for a condo loan? Your DFW PrimeLending Condo Loan specialist can help you determine if you meet the guidelines and help you through the loan-seeking process.
Your credit score must qualify. For many lenders, the minimum score that will qualify is 680. There are plenty of free credit report sites (but do make sure it is legitimate, first) from which you can get a copy of your credit report to make sure your score is high enough to qualify for a loan.
The condominium project must be approved, if you plan to apply for an FHA or VA loan, or plan to go through Fannie Mae or Freddie Mac. This approval only has to be obtained once for the entire project, but it does have to be renewed periodically. There are also sites where you can input the project’s location and find out if it is approved or not. If it is not listed, then you may be the first one, so there is no need to assume that a loan will not be awarded simply because the project is not yet approved. If it has been deemed unwarrantable (which means it will not get approval), then you still may be able to procure a loan, but it will not be able to be through any of the three mentioned at the beginning of this paragraph.
Whether or not your condo project has been approved by Fannie Mae and Freddie Mac, you might wonder if your condo project can be approved by FHA. Since their qualifications are a little bit different from Fannie Mae’s and Freddie Mac’s, this is definitely something to pursue to make it easier to sell the units. Your DFW PrimeLending Condo Loan specialist is available to discuss your concerns about financing your condo if an FHA loan is needed.
You will have to meet the following:
- Minimum credit score of 620 or higher. Banks and other lending institutions may require even higher credit score.
- You or the DFW PrimeLending Condo Loan expert you are working with may go to this website – https://entp.hud.gov/idapp/html/condlook.cfm. You can search for condos in your community that are on the approved list for FHA loans.
- Get pre-approved for a loan because once you find a condo community you like that has been FHA approved, the condos may be sold quickly. Being pre-approved will enable the process to go smoother so you can get into the condo you want.
If you have checked into purchasing a condo, chances are you have heard the term “condo project approval.” This term refers to the process a condominium complex must go through in order to meet the criteria established by either Fannie Mae (for a conventional mortgage) or HUD (for a FHA mortgage). DFW PrimeLending Condo Loan specialists understand that the entire project must meet the criteria established by the entity purchasing the loan.
Perhaps you’ve already started looking at condos but were told the one you want to purchase is an unwarrantable condo. What is that, you wonder. A warrantable condo can be or has been approved by U.S. Housing and Urban Development (HUD) to be insured by Fannie Mae or Freddie Mac. An unwarrantable condo will not be able to be approved for some reason – which does not necessarily mean the condo is bad. It only means that many lenders will choose not to lend for that building. A DFW PrimeLending Condo Loan specialist will be able to help you understand more about unwarranted condos.
The easiest way to determine if your condo project is approved by Fannie Mae or Freddie Mac is for the lender to use Fannie Mae’s free online Condo Project Management tool. The DFW PrimeLending Condo Loan officer also has access to other documentation that will enable them to determine if the condo project is approved or not, particularly related to Fannie Mae or Freddie Mac requirements.