I live in central California. I wanted to buy a condo. The mortgage lender said unless 51%?
by Mortgage Rates on Monday, September 27th, 2010 | 8 Comments
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This is how they protect themselves – 51% owner occupied = stability and careful attendance to maintenance.
To say it another way: most people don’t wash a rented car.
I think that it is. For a condo complex to work efficiently it has to stay relatively full. If a condo is less than 50% full unless they are still building it and all of the completed units are full, than you are talking about a condo complex on the death spiral where the value will rapidly drop and the mortgage becomes valueless.
It depends, it sounds like they’re trying to discourage people from buying a condo only to turn around and rent it out.
But honestly, I’ve never heard of it, but it may be common practice. I’d just go to someplace like Wells Fargo, or B of A, and even if you don’t want to get a loan through them, they should be able to give you a lot of good advice.
Good luck!
No, there is no real standard. Each mortgage lender will have their own requirement for how many units must be owner occupied, and it will even vary by area or neighborhood. In my area, lenders require 80% owner occupied. Try some other lenders. Maybe you should go with a broker, so that they can inquire on your behalf to many different lenders.
Do be careful though. You should find out the reason that the owners of the units you are looking at are not living there. You will generally not find out anything good. There could be a problem with the complex.
My mortgage lender said 70%.
This is fairly common. What the lender is trying to avoid is lending on a condo that is undesireable as a residential unit. The higher the tenant occupancy rate in what could be owner occupied condos tends to indicate a combination of difficulty selling them and lack of desireability in occupancy to the adjacent owners who are living next door and across from tenants. It is less comfortable to live next to tenants when you are an owner, you’re working hard to maintain your space and they are often unaware of the term pride of ownership, afterall they have no such thing.
For your own sake don’t buy in a complex that has a high number of rentals. Many opportunites to regret that purchase.
You are lucky the standard at one time across the board was 90%. Only 10% could be rented out .
Each lender has different guidelines. You should check with a mortgage broker and apply through him. He will have more options as to lenders that are a bit more flexible.
Make sure when you contact him you make him aware of the problem you are having and your particular needs
I hope this has been of some use to you, good luck.
“FIGHT ON”
I doubt it! that sound like highway robbery… You should try looking at FSBO (for sale by owner) a lot of times they will carry back the mortgage themselves and you make payments directly to them, of course there will be a down payment but it’s easier to qualify and less hassle because you will make the terms together with the owners that work best for both parties.