Helping you get condos financed in Florida
Myth vs. Facts
There are a lot of “Mortgage Professionals” willing to share their knowledge (or lack there of) about condo financing in Florida. We have compiled a list of the most common mis-information that is being provided.
The “facts” below are based on information provided directly from Fannie Mae. Every lender may have their own internal policies and/or guidelines, but the majority of them will underwrite their loans based on Fannie Mae guidelines.
Most Common Myths about Condo approvals
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1.The percentage of rental units in a condo project cannot exceed 30%. Fact: There is no set percentage requirement for owner-occupants versus rentals when the loan being review is for a primary or secondary home in an established project. At least 51% of the units in a new/newly converted project must be sold to primary or second home buyers. The myth has been created due to the lack of understanding the difference between an established condo and a new/newly converted condo.
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2.At least 51% of the unit owners in a condo must be primary or second home owners. Fact: 51% owner-occupancy ratio is required ONLY when the subject loan is for an investment/rental transaction on in an established project. There is a procedure for exceptions to this rule also, see PEW.
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3.A Fannie Mae approval is the same as a FHA approval. Fact: A Fannie Mae approval is not the same as a FHA approval. The requirements vary and the procedures are different for each.
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4.Bank owned units (or REOs) are counted as investor owned units. Fact: Bank owned units acquired through foreclosure are considered owner-occupied units for the purposes of the occupancy ratio, if the bank has the unit listed for sale (not rented).
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5.All mortgages on condos in Florida require a 25% down payment. Fact: A Limited-Review will require a 25% down payment for a primary home transaction. Any other review process will allow for as little as 3% down payment on a primary home transaction.
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6.There are no options for investors to finance condos in Florida. Fact: Not true. The reason for this myth is because most lenders will only accept a limited-review on condos in Florida and a limited-review is not acceptable on investment transactions.
FloridaHomePath.com, LLC is not a mortgage lender. FLCondoTeam.com is a site for information purposes only. All information provided is based on Fannie Mae condo project requirements. Click here for Fannie Mae resources. Lenders and banks reserve the right to have more restrictive requirements at their sole discretion.
** All loan information is updated frequently. Contact a Mortgage Professional to confirm loan details. All material is subject to change without notice.
FloridaHomePath.com is not owned or affiliated with Fannie Mae. Flcondoteam.com is owned and operated by FloridaHomePath.com, LLC. See our privacy policy and terms of service.
