Non-Warrantable Condos
Are you looking to buy a non-warrantable condo? If so, there is a chance you have already been turned down by other lenders.While many mortgage companies only finance warrantable condo purchases, Clarity Home Lending can help you purchase a warrantable or non-warrantable condo.
What is a non-warrantable condo? Non-warrantable condo's and condominiums that do not meet the rules for Fannie Mae or Freddie Mac.They may not meet the rules for many various reasons, such as too many non-owner-occupants, an active lawsuit against the HOA, or simply that their FHA certificate has expired.
Non-warrantable condos are seen as riskier purchases for lenders, which is why not every lender is willing to work with buyers for these types of properties.
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15% Down
These loans are issued by participating lenders in the USDA program, and offer low interest rates and minimal down payments as low as 0%.
Private Mortgage Insurance
All USDA loans come with upfront and annual guarantee fees. Guarantee fees are similar to mortgage insurance and go toward funding the USDA loan program. The annual fee is added to your monthly payment and lasts for the life of the loan.
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Loan Size
Homes financed by USDA loans must be in eligible rural areas. You can see if a home is eligible by visiting the USDA’s eligibility site to look over a loan eligibility map. This interactive map will allow you to search for a specific property to see if it’s located within a geographic location deemed eligible by the USDA for this type of government-backed financing.
Credit Score & DTI
USDA loans are for families who demonstrate economic need, so your adjusted gross income can’t be more than 115% of the median income in the area. You can find out if your income is eligible in the same place you check property eligibility. Just follow the same link to the USDA’s eligibility site, except choose “Income Eligibility” from the menu.
In addition, you must show that you have a stable income and can make your mortgage payments without incident for at least 12 months based on your assets, savings and current income.
Your mortgage lender will also look at your debt-to-income (DTI) ratio when they consider you for a USDA loan. To give yourself the best chance of qualification, we generally recommend a DTI of 43% or lower.
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