Contents
- 1 What does non-conforming condo mean?
- 2 What’s the difference between a conforming and non-conforming loan?
- 3 What is the best description for a non-conforming loan?
- 4 What happens to a non conforming real estate property?
- 5 Can a non conforming use be grandfathered in?
- 6 Where can I find a non warrantable condo loan?
What does non-conforming condo mean?
A warrantable condo is one that meets certain standards of Fannie Mae (OTCMKTS: FNMA) and Freddie Mac (OTCMKTS: FMCC), which means it’s eligible for conventional mortgage financing. In other words, you can finance a warrantable condo in the same way you would a single-family home.
What’s the difference between a conforming and non-conforming loan?
A conforming loan is a type of conventional loan that meets Fannie Mae and Freddie Mac’s purchase standards as well as a specific loan amount. A non-conforming loan doesn’t meet Fannie and Freddie’s purchase standards. Government-backed loans and high-value jumbo loans are two examples of non-conforming loans.
Why is a non-warrantable condo risky?
When a condo is labeled as non-warrantable, it means that it does not meet conventional guidelines and will not be bought by government-backed entities like Fannie Mae and Freddie Mac. Many lenders consider financing a mortgage for this type of property to be too risky which can make it harder to finance.
What is the best description for a non-conforming loan?
A nonconforming mortgage is a home loan that does not adhere to government-sponsored enterprises (GSE) guidelines and, therefore, cannot be resold to agencies such as Fannie Mae or Freddie Mac. These loans often carry higher interest rates than conforming mortgages.
What happens to a non conforming real estate property?
If they sit vacant for a set amount of time or the use is changed, the legal non-conforming status is lost. After that, any structure or use has to comply with the zoning code. The real estate bust has exacerbated this issue. Owners abandon underwater properties, tenants leave and the banks may take months or even years to foreclose.
What does it mean when a condo is considered a non warrantable?
Finding out that the condo you’re looking to buy is considered to be a non-warrantable condo can be heartbreaking. When a condo is identified as a non-warrantable that means it does not meet conventional guidelines (meaning Fannie Mae and Freddie Mac won’t buy the loan).
Can a non conforming use be grandfathered in?
Non-conforming uses are only grandfathered as long as they are in continuous use. If they sit vacant for a set amount of time or the use is changed, the legal non-conforming status is lost. After that, any structure or use has to comply with the zoning code.
Where can I find a non warrantable condo loan?
A portfolio lender is a bank, credit union or non-bank lender that does not sell its loans, or doesn’t sell all of them. Instead, it holds onto some loans until the loan is paid off. You may find a portfolio lender by using the search term “non-warrantable condo loans.”