$50,000 to $10 million loans

Condo loans provide a pathway for buyers to own a unit in a condominium complex. While the loan process is similar to that for single-family homes, there are additional considerations, such as condo association approval and specific insurance requirements.

What to know about condo loans

Condo loans are mortgage loans specifically designed for the purchase of condominium units. Condominiums, or condos, are individual units within a larger building or complex, with shared common areas and amenities.

Loan types

• Conventional Loans - Available for condos, often requiring a down payment of at least 5%.
• FHA loans - Government-backed loans that require a lower down payment (as low as 3.5%) and are available for approved condos.
• VA loans - Available for eligible veterans and service members, often with no down payment, provided the condo is VA-approved.

Eligibility requirements

• Credit score - Generally requires a good credit score (usually 620 or higher for conventional loans).
• Down payment - Typically 5% to 20%, depending on the loan type and other requirements.
• Debt-to-Income ratio - We will assess your debt-to-income ratio to ensure you can afford the mortgage payments.

Condo association approval

• Loans often require that the condo association to meet certain criteria.
• The association must be financially stable, with a sufficient budget and reserves.
• A high percentage of units (usually at least 50%) must be owner-occupied.
• No significant litigation should be pending against the condo association.

Condo project approval

• For FHA and VA loans, the entire condo project must be approved by the respective agencies.
• Conventional lenders may also have their own approval processes for condo projects.

Insurance requirements

• Condo owners typically need to carry individual condo insurance (HO-6) to cover the interior of their unit.
• The condo association must have a master insurance policy covering the building and common areas.

Resale and rental restrictions

• Some condo associations have rules regarding the resale and rental of units.
• It's important to review the association’s bylaws and regulations before purchasing.

Reserve requirements

• Lenders often require condo associations to have adequate reserves for maintenance and repairs.
• A portion of the monthly association fees usually goes into these reserves.