Would you buy a condo that does not qualify for Fannie Mae/Freddie Mac?

[tscagg]

Thanks for all the information. I'm in the market for a small condo and have run into this issue. The unit I want is perfect, but it is non-warrantable also. For me it's not a big deal for purchasing as I'm paying cash for the unit. But I'm told that when I go to sell is when it becomes an issue for the new owner.

I really like the unit...but I am told it is risky. Can the non-warrantable issue go away after I purchase, because of the market in my area? There is a major shopping center which will alter the area in the next several years, it's growing like most of Austin.

THANK YOU for any advice.

[thebigW]

Why is the condo non-warrantable?

[BoBromhal]

a non-warrantable condo limits the pool of buyers, since financing is more difficult to obtain, and some buyers won't have the higher downpayment.

the main item we see is the "investor-owned" percentage. if the % of investor-owned units is 2x the limit, thenn you're not likely ever to be warranted.

The other one is where 1 entity owns a lot of units (10%?) in the building.

[adjusterjack]

Originally Posted by Sandhillian

The HOA actually owns the unit and has for the entire life of the building (42 years). We do plan on living in the unit. It does seem like once word gets out the HOA will realize they have to sell and we are assuming we would live there long enough for that to happen and hopefully long enough for any dip in values to rebound.

42 years?


It's obvious to me that the HOA is NEVER going to change unless the current board is voted out and a new board voted in that will sell the unit as soon as possible.

[TeamLynn]

Are you looking for a place to live or as an investment.
I think most condos are horrible for investors.
If you are looking for a place to live it might be a great roll of the dice.

Single family is getting expensive. Next best option for many would be a condo, but they can't financing......that may force them into condos even if that's not what they wanted initially.

There have been talks for a while about making it easier to get condo financing.
The other idea is buy it, get on you HOA board, and get busy getting your building/development FHA certified.
That opens it to many more buyers. Keep up the certification.

Get a list together of lenders who will lend on it for lower down payments...make sure the realtors get that list.

Be proactive....do everything you can to help keep the property up and in condition and be cognizant of reserves and repairs.