7/2/2024 – How to deal with your Non-warrantable listing Happy Fourth of July week! I hope you’re doing well. Let’s dive into a pressing issue in the real estate market-a growing number of condos are being deemed non-warrantable for financing due to insurance or deferred maintenance issues. This is causing properties to sit on the market longer and prices to stagnate or drop. But fear not, there’s a potential solution-for the seller to buy down the interest rate, making these properties more competitive with other complexes that are warrantable and can get conventional financing. Let’s start by comparing pricing on a Non-Warrantable condo and a condo with conventional pricing allowed. For comparison purposes, we will use a $600K price and a 10% minimum down payment, as that is the minimum on a Non-warrantable condo. Below that number, we will have the amount a seller must pay to buy the rate down to make the payment equal to the rate of a warrantable condo. 10% down Non-Warrantable – $4200.06 10% down Warrantable – $3547.42 + PMI $85.50 = $3632.92 3 Points extra $16,200 will make the non-warrantable payment the same! 15% down Non-Warrantable – $3741.84 15% down Warrantable – $3389.62 + PMI $63.75 = $3453.37 2 Points extra $10,200 will make the non-warrantable payment the same! 20% down Non-Warrantable – $3315.24 20% down Warrantable – $3190.23 1 Point extra $4800 will make the non-warrantable payment the same! 25% down Non-Warrantable – $3031.73 25% down Warrantable – $2918.69 1.5 Points extra $6750 will make the non-warrantable payment the same! If I have a listing and the only offers I am getting are with 10% down, and I need to sell the property, I am offering a $16,200 credit to make the payment equal and hold that buyer in. If you need help explaining this to a potential buyer, I will sit down with them, go over everything, show them the math, and help them understand. The above is based on a 760 credit score and enough income to qualify. A first-time buyer may be eligible for better interest rates on conventional loans. I am available the rest of the week and the weekend if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com. But wait, there’s more! Interest rates had a rough Friday and Monday, and today is slightly better! There is now a concern that the GOP will take both houses of Congress and the Presidency, which is historically not good for bonds. 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge We do loans in all states, so call me with anything you need. Government Loans (FHA / VA/ USDA) are in the high 5’s and low 6’s Conventional Loans up to $766,550.00 are in mid to-high 6’s High Balance Loans $766,550.01 – $ 1,149,825.00 are high 6’s and low 7’s Jumbo loans above $1,149,625 are in high 6’s and low 7’s Bank statement loans - They are available with 10% down again! 7’s to 9’s depending on down and credit score. Profit and Loss Statement loans- You don’t need bank statements, just a profit and loss statement! No income qualifier – 40% down with reserves! In the 8’s! 0 down loans are in the high 7’s – 660 credit score min right now, up to $793,000.00. Private Money lenders - Hard Money Loans – 35% down! No Ratio Loans 30% down DSCR – Debt Service Coverage loans with as little as 15% down Bridge Loans - typically 7.99% with limited fees – and they get you where you need to go! 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates! Interest rates are subject to change without notice! The above are LA County Loan Limits. Condo Update? Nothing new, yet!!! Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE: American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough! American Beauty Gardens: 19% delinquency on special assessments due. 19% are 60 days or more late! We can do with 5% down, but others can’t! American Beauty Village: On Fannie’s List. Per Fannie, this project needs critical repairs and may have conditions such as material deficiencies and significant deferred maintenance. This project’s master insurance policy deductible exceeds the allowable limit Bouquet Canyon Village is on Fannie’s list! Per Fannie – This project’s master insurance policy coverage does not meet the requirements Bridgewater, Emeryville - On Fannie’s list! Brookside Walk – Insurance – Cabrini Villas, Burbank - On Fannie’s list! Calla and Rowan – 27513 Illumination – Fannie Mae Approval expired – New Construction. See Blog on 5/7/2024 Cameo Woods HOA - Per the litigation disclosure, the association is being sued by a homeowner for water heater damage and discrimination, and the damage is still ongoing. We received confirmation that the HOA’s insurance agency is not covering the lawsuit, and the claim was denied due to the nature of the complaint. Canyon Village – Reserves and 10% of the dues not going to reserves! Canyon Oaks – Insurance On Fannie’s list! Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list! Cassia and Jasmine – 26949 Winding Trail Court – Fannie Mae Approval Expired. See Blog on 5/7/2024 Cornerstone – Insurance -On Fannie’s list! Creekside – ??? We don’t know Encino Oaks – 5460 White Oak Ave – On Fannie’s list! Lantana at Valencia – 27034 Hummingbird Lane – Fannie Mae Approval – expired. See Blog on 5/7/2024 Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list! Madison at Towne Center – Litigation – We can do with 5% down, but others can’t! Mariposa: On Fannies List. Per Fannie Mae – This project’s master insurance policy coverage does not meet the requirements. Orchid at Valencia – 27033 Open Sky Place – Fannie Mae Approval Expired. See Blog on 5/7/2024 Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list! Princessa Estates – has $8200 in Reserves, and they are voting on an assessment in May! Rainbow Sierra Terrace – On Fannie’s Naughty List – This project’s master insurance policy is not written to Replacement Cost Value. See Selling Guide Sec. B7-3-03, Master Property Insurance Requirements for Project Developments. Scenic Hills – Insurance – On Fannie’s list! This project’s master insurance policy coverage does not meet the requirements in Selling Guide Sec. B7-3-03, Master Property Insurance Requirements for Project Developments. Shadow Ridge – Oak Park – Insurance -On Fannie’s list! Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list! The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list! Treana - Stevenson Ranch: On Fannie’s list! Per Fannie, this project needs critical repairs and may have conditions such as material deficiencies and significant deferred maintenance. Valle Di Oro is on Fannie’s list! Per Fannie Mae, this project contains timeshare, fractional, segmented, or split ownership units or other arrangements (such as mandatory rental pooling, shared interest apartments, or community apartments) restricting the unit owner’s ability to occupy the unit. Vista Del Canon – Insurance is too low, UGH! Village Park Condo – It’s over the max deductible with that 50k per unit. Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list! Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA – On Fannie’s list! West Creek Condos and Townhomes: On Fannie’s List. Per Fannie, this project’s master insurance policy coverage does not meet the requirements in the Selling Guide! Please let me know if you hear anything new on condos or townhouses. I am still available all weekend, including the 4th if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com. Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.
