Home searching is always eventful. Just when you think you found the PERFECT CONDO – BAM – you hear the words ‘non-warrantable’ condo and things change!
So let’s first discuss what a non-warrantable condo means?
A Non-warrantable condo is a condo that is not eligible for conventional financing – aka the loan cannot be sold to Fannie Mae and Freddie Mac (and probably FHA won’t either – this may not always be true). So why won’t Fannie and Freddie buy these loans you may ask?
Common Reasons for Non-Warrantable Condos:
- The condo complex is not yet completed
- The complex’s developer has not given control over to the Home Owners Association
- The condo building allows for short-term rentals
- If one person owns more than 10% of all the units in the complex
- If the majority of the condos are rented out
Now how can you finance a non-warrantable condo in Nashville? Usually you will have to either pay cash or use a private in-house loan from a mortgage company or bank. So the first step is find the perfect lender for your situation. Many lenders will give a in-house loan with a larger down payment. However, many agents and buyers believe it is impossible for certain buyers to obtain a non-warrantable loan (for example if they don’t have 20% to put down). However, with the right lender you can make it work. Here at Nashville on the Market we work with lenders with creative lending programs – so let us know if you run into a non-warrantable loan or need creative financing and we are here to help!
Happy Hunting!
