Condo = Caution
Buying a condo in Southeast Michigan continues to challenge our clients’ patience as obtaining financing for these properties has been difficult, but not impossible. There are two types of condos to consider: Detached Site Condos and traditional Attached Condominiums.
Detached Site condos are views as “single family homes” in the eyes of the lenders. Normal financing options exist on these properties with no extra hurdles to dodge.
Here is what is different and what you need to keep on your radar with attached condos: Conventional vs FHA
- Conventional Loans:
- Condo Questionnaire Required – Cost $150-$250
- 15% of owners are delinquent on association dues – No loan
- Rates & Fees slightly higher – Investors feel more risk with these properties
- FHA Loans:
- Key Point – Is development approved for FHA financing?
- Recent changes mean all condo developments need new FHA approvals
- No more grandfather cause
FHA approval is about a 30 day process, but is a necessary stage for every attached development. Keep these things in mind when considering a condo and remember: CONDO = CAUTION
NOTE: New Construction Loans currently have no conventional financing options available, but the builder can get FHA approved for financing options.