Condominiums have become a real pain in the neck. Fannie Mae has enforced and created new rules that have made the process more difficult. Realize that there are 2 parts to getting approved- the borrowers financial pedigree AND the condominium approval. Please look at the following items before jumping into a contract:
1. Banks want to see that at least 70% of the units are sold/in contract/owner occupied.
2. No 1 entity owning more than 10% of the units. That includes the sponsor.
3. Banks want to see at least 10% of the operating budget for the year in reserves.
These are not hard and fast rules for every lender but please be careful.
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