August 16, 2022

I hope you had a warm weekend and that life is treating you well.

Condo approvals are big, especially with affordability being on the more difficult side right now. Every loan product is different; some complexes can blow up a file!

Conventional loan condo approval –

• You do not need a condo review on a detached condo.
• You will need a full condo review with less than 10% down on an owner-occupied purchase. A standard form will need to be filled out by the HOA, and an Underwriter is looking at everything from the Budget, Balance sheet, and assets. They will ensure that no single owner owns more than 10% of the units. They check for litigation, make sure that 10% of the dues go into a reserve account, and about 40 other questions too.
• With 10% or more down for an owner-occupied property, you will only have to answer about eight questions on the questionnaire. There are no questions on the budget, balance sheet, and reserves, which is sometimes a lifesaver!
• If there is litigation, we can look at it on a case-by-case basis. If it is building defects or a lawsuit against the builder, then it is unlikely we will be able to do a loan under this plan. If it is a slip and fall or some other BS kind of issue, we will likely be able to do the loan.

FHA Condo -

• Detached condos do NOT require approval!
• The attached Condos - must be approved by FHA.
• Single Unit approvals- AKA Spot approvals - These are semi-back as of 2019 - This still requires a full condo approval like a Conventional loan. Still, you also need to ensure that the project has never been turned down for FHA approval and that no more than 10% of the units in the project have FHA financing! We are getting these through, but you cannot order an appraisal until you have a case number, so you can’t order an appraisal until you have condo approval! UGH! We need 40-45 days to close in these situations.

VA Condo Approval –

• VA Has a more extensive list of approved condos, and they never seem to expire.
• Detached condos require approval by VA
• If VA finds out about litigation, they will pull their approval from a condo project!

Non Warrantable condos -

• Some projects are non-warrantable and do not qualify for any of the above financing. If a budget is off, or an HOA is not putting money into reserves, if there is litigation… All of those issues can be solved with a lender that does non-warrantable condos! YAY!
• 10% down Minimum.

Interest rates are hanging in there. Nothing earth-shattering lately, and we are just hanging around waiting on economic news to move the needle.

• 30-year Government Loans (FHA / VA) are in the low to mid 4’s or high 3’s if you wanna pay a few points. LOL!
• Conventional Loans up to $647,200.00 - Mid 4 to low 5’s.
• High Balance Loans $647,201.00-$ 970,800.00 are in the high 4’s to low 5’s
• Jumbo loans above $970,801 are in the high 4’s to low 5’s
• 5/1, 7/1, 10/1 Arms are in the low 4’s to low 5’s for over $647,201. Under that, don’t bother right now!
• Bank statement loans - They are available with 10% down again! 6’s + depending on down and credit score.
• Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 6’s.
• 0 down loans are in the 5’s – 620 credit score min right now! Mid 6’s, for the most part, up to $670,000.00.
• 0 down Jumbo to $975,000.00 – 680 credit score – call for a quote
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 6.99% with limited fees – But they get you where you need to go!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I will be around all week 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 xt. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!