Fannie Mae and FHA Requirements for Condos in Las Vegas
Buying a new condominium can be very exciting. You can have a spacious condo in which there is no lawn to mow, and it is a great investment. However, in order to finance the purchase, most people need to obtain a loan. Two of the most popular loans available for only a limited set of condos in Las Vegas are Fannie Mae and FHA loans. When you are obtaining a loan, you need to understand the options, so you will know which type of loan is right for you.
Recently The Ogden in Downtown Las Vegas became the first condo development in Las Vegas to get Fannie Mae and FHA loan approval since 2007. This means that people looking to purchase a residential condo in Las Vegas have more options than they have in many years!
What is a Fannie Mae Loan?
Fannie Mae is sponsored by the government and looks to make homes affordable to home owners. The association buys mortgages from banks and then sells them. The idea when President Franklin Roosevelt created the program was to allow more people the dream of owner a home. This applies to condominiums as well.
Fannie Mae Requirements
In recent years, the number of condo owners who have faced foreclosure rose drastically; therefore, Fannie Mae implemented new lending requirements for condo purchases. Some of the requirements include:
• Credit Score: To be able to get a condo loan from Fannie Mae, you must have a credit score of at least 660.
• Down Payment: You must have at least a 3% down payment for the condo.
• Inspections: The condo must pass an inspection and certain criteria must be met.
• Maintenance fees: If a certain number of owners of a condo complex are more than 30 days late in making payments, it could affect a Fannie Mae loan.
• At least half of the condo units must be occupied.
• Manager review: The property manager is required to complete a questionnaire and send it to the lender.
• Condo size: Units must be at least 400 feet.
• Reserves: 10% of the association dues are allocated to reserves.
What is an FHA Loan?
The Federal Housing Administration insures these loans. They are the most popular loan available as the credit requirements are more lenient. You normally need a down payment of at least 3.5% of the loan. The loan was established in the 1930s as an answer to the increased number of foreclosures. It helps people be able to obtain the dream of home ownership. It is easier to get approved for this loan. If you have a lower credit score, you can still get approved but the rate might be a little higher.
FHA loans for condominiums can be more complex than regular home loans. Some of the qualifications include:
• Approved list: The condo complex must be on the FHA approved list. It is required to have two complexes and meet the safety guidelines.
• Condo must have good insurance coverage: It must have hazard insurance and liability insurance.
• Residential use: The condominium complex must be used primarily for residential purposes.
• Condo units must be complete: With some exceptions, such as landscaping, the condo complex must not still be under construction.
• Occupied: At least half of the units must be occupied by owners.
• Required documents: You must submit documents, including by laws, Master Deed, budget deed, insurance policy, and income statements.
• Credit score: A credit score of at least 580 is preferred.
The financing on a condominium is somewhat different, so make sure you understand how these loans work, so you can obtain the best loan available for your condo. You can then enjoy all of the advantages that come with owning a condominium.