Condos are “Movin’ on Up”
One of the more dynamic segments of the housing markets is the condo market. As the overall real estate market recovered from the recession, condos have come back strong. Many “broken” projects that were victims of poor timing in 2007-2008 have new life and strong sales. Luxury condo projects in highly desirable locations are in demand. Likewise, more moderately priced condos allow budget conscious homebuyers entry into neighborhoods where single family homes are priced out of reach.
In order for buyers to obtain conventional financing for condo, the project must be approved by the lender. In general, here are just a few of the guidelines that lenders must follow when offering mortgages on condos:
· No more than 50% of the project’s units may be occupied by renters
· For new projects, as few as 50% of the units must have been conveyed or under contract for purchase
· No single entity may own more than 10% of the units
· No more than 15% of the total units can be more than 30 days delinquent on association fee payments
· Minimum insurance coverage and other requirements apply
Condos may also be financed with FHA and VA home loans with project approval. Condos are an attractive form of housing for a growing number of people that desire low maintenance living in an urban environment.