Not Every Lender Says No to Lending on a Non Warrantable Condo
The majority of mortgage lenders will not lend to a non warrantable condo because they are not eligible to be sold to Fannie Mae or Freddie Mac. These government agencies will not purchase this type of mortgage because it is considered risky. Therefore, if you are looking to purchase a non warrantable project, you will need to do some research on alternative financing options. Although it may seem discouraging, do not give up! There are plenty of mortgage lenders out there who will be willing to lend to you.
One of the mortgage companies that have programs available for financing non warrantable condo projects is Starr Mortgage Company, Inc. Their website can be found at https://www.starrmortgagecompany.com/non-warrantable-condo-projects/. Starr Mortgage Company is based out of New York and has loan programs available in Florida, New Jersey, and New York. Starr Mortgage Company has programs available to assist in financing Non warrantable condo projects. Some of the special services that Starr Mortgage offers are to assist non-conforming condos to conform to set guidelines, and to locate competitive financing for projects that do not meet the specified guidelines.
While it is not impossible to find financing, the terms are not advantageous to the borrower. Some banks also offer mortgages, but you will have to do some extensive digging to find those banks that do. The drawback to these mortgages is that it requires a much more sizable down payment, usually anywhere between 30-50 percent, and a higher interest rate than the standard run-of-the-mill mortgage. Putting aside the unfavorable interest rate and down payment size, however, obtaining approval is not difficult. As the borrower, all you need to do is provide your income, prove what assets you own, and prove your credit score. The time for approval is quick, and most closings take place in less than 30 days.
While financing is not as easy to obtain for these types of projects as non warrantable condos, there are lenders out there who will finance these types of transactions. Although the mortgage rates will exceed the average Freddie Mac standard rate, financing is available for people who look and apply for it.
While financing is not as easy to obtain for these types of projects as non warrantable condos, there are lenders out there who will finance these types of transactions. Although the mortgage rates will exceed the average Freddie Mac standard rate, financing is available for people who look and apply for it.
