Call 303-933-1466 or visit http://www.equitylinkmortgage.net Getting a mortgage on a condo is different than getting a mortgage on any other type of residential property: condos are harder as they are riskier. Riskier because lenders have to worry common areas, homeowners’ association and other unit owners, in addition to the condo unit buyer and their unit. Would-Be Borrower Bob Looks for a Denver Mortgage Broker Let’s say borrower Bob wants to buy a condo in south Denver. He looks for a mortgage broker in Denver, Lakewood or Centennial. No matter which one he chooses, his mortgage broker, to give him the best rate, will want to get him a conventional, conforming loan. Denver mortgage broker will try to get Bob an FHA loan before trying any other kind of loan: they’re cheaper (i.e., they come with lower interest rates). (Yes, we’re making Bob pick the Denver mortgage broker: she’s got more good reviews on Yelp than the other ones plus I named this section “Would-Be Borrower Bob Looks for a Denver Mortgage Broker.) Conforming conventional loans are loans that Fannie Mae or Freddie Mac would purchase. FHA loans are loans that the FHA would insure. The first thing to keep in mind is that it is a lot harder to get an FHA condo approval than a conventional, conforming one: the FHA will only insure condo mortgages if the unit is part of an approved project or if someone spot-approves the unit (takes time, effort, and can cost money too) and their approval project is harder and it costs money to remain approved, so few projects stay approved. This is the link to check if a condo project is approved by the FHA: https://entp.hud.gov/idapp/html/condlook.cfm. So, the first thing people who're looking to buy or refinance a condo unit is to determine whether they qualify for a conforming conventional loan or not. Or if the mortgage broker or lender they're working with can do unwarrantable condos, i.e., condos that don't fit the criteria of Fannie Mae, Freddie Mac or FHA.) Unwarrantable condo mortgage loan programs have looser qualifying criteria but they still have qualifying criteria. Borrowers should make sure that their unwarrantable condo matches that criteria. Bob's and the Most Common Traps to Getting a Mortgage on His Denver Condo Though the complete criteria takes up several pages, most condo projects that don't comply with Fannie Mae, Freddie Mac and the FHA's programs do so because they don't meet one of the following 7 requirements: 1. Budgets must call for an amount equal or higher than 10% of the association’s budget must be transferred into the reserves account. 2. No entity can own more than 1 unit in projects with 4 units or less; 2 units in projects with 5-20 units; 10% of the units in projects larger than 21 units. 3. No part of the association’s income can come from things that are not essential to running an association (i.e., they must be from regular or special assessments and maybe from cable fees; they can’t be from the association running a business or renting space). 4. No more than 25% of the project can be commercial in nature. 5. The developer must have turned over control to the association. 6. The association is involved in a litigation that's not about foreclosure and there are monetary motivations at play. 7. No more than 49% of the units can be rented. There are many other restrictions, but they are rather rare. Still, people who are thinking about getting a mortgage on a condo should talk to a loan officer early in the process. What Borrower Bob Should Do To Get His Denver Condo Mortgage The Easy Way The documents that reveal whether the condo project meets or does not meet the requirements for conforming conventional or FHA loans are: 1. Budget 2. By-laws 3. Condo Rules and Regulations 4. Articles of incorporation. Borrower Bob (and anyone else) thinking about getting a mortgage on a condo should at the very least ask the person in charge of running the association questions that would reveal if the project meets the criteria listed above and get a copy of the budget and provide it, together with the answers from the person in charge of the association to their mortgage broker or bank. And, as mentioned above, it makes no difference whether they are dealing with one mortgage broker or another. The best mortgage broker in Denver, CO is just as bound by those rules as the best Lakewood, Englewood or Centennial mortgage broker, for instance. This video can be found at https://www.youtube.com/watch?v=FlBBoGXLNVE&feature;=youtu.be My channel: https://www.youtube.com/channel/UC2M3T6nteJD9dyyZB4M_5bQ Follow me on FaceBook: https://www.facebook.com/EquityLinkMortgage?ref=br_rs Google +: https://plus.google.com/u/0/b/112133113261022982136/112133113261022982136 My site is at: http://www.equitylinkmortgage.com.

• published: 12 Jul 2015
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