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Financed loan for a Condo purchase
Needed 100% financed loan for a Condo purchase
I was approved in July for a 100% financed loan for a condo conversion.Not sold are 50% of the units in this condo conversion, so I was placed into escrow some time ago (extension). This lender requires 50% of the units to have sold prior to funding the loan.
Well due to the length of time it has been, and the volatile mortgage market, I am now not qualified for 100% from this lender. They say I will now need to put down at least 10%. The property is 335K.
My Question now is this: Is there any lender out there that WILL APPROVE 100% financing for a condo conversion? My Fico scores are: 636, 622, 605
Thanks in advance for all your help!
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2 Replies
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Generally speaking, securing a condo conversion loan is particularly difficult, given that some lenders reportedly do not allow maximum LTV financing based solely on credit scores. Try some of the following options and approaches:
Speak to Specialty Lenders
Credit Unions: Some credit unions provide more lenient financing options, such as 100% financing on certain loans. If you’re eligible to join or are already a member, it is advisable to inquire about this.
Local Banks: Community lenders or smaller, more localized banks may have some programs dedicated to purchasing condos, especially if they understand the region well enough.
Specialized Mortgage Lenders: Some lenders focus on first-time home buyers and people with lower credit scores. They also offer 100% financing programs.
Look into FHA Loans
FHA Financing: FHA loans are very similar to conventional loans as they have certain credit requirements, although they are more forgiving than other housing loans. This could be a good possibility since a 3.5% known initial investment exists. Still, it could be completely ignored if the condominium conversion follows the guidelines.
Government Programs
USDA Loans: USDA loans can cover an entire property or 100% loans, but only if that specific property is in an approved rural area. Ensure that location and income meet the requirements.
VA Loans: If one or both of you are a veteran, you may become eligible for a VA loan, which provides 100% coverage on financing.
Enhance Your Credit Rating
Credit Repair: Even as you look for a financing partner, it’s worth working on your credit score if you’ve got one. One approach that can assist is debt reduction, making monthly payments on time, and filing disputes on errors in the credit report.
Talk to The Current Hand holder.
Explore Possibilities: This extends to your current customer’s provider or hand-holder. It suggests that increasing escrow or other forms of financing may be viable options.
Finding a lender willing to accept your credit scores and fund 100% of the condo conversion financing may be hard. However, obtaining funds from other non-conventional lenders, seeking government assistance programs, and applying for an FHA loan would improve your chances. Do more than sit around. Actively work towards improving your credit score. It also helps to talk to a home loan expert who will help you with strategies to source home loans. Good luck!
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Condominium units are becoming harder to finance due to high insurance, skyrocketing HOAs, increasing property taxes and high costs in deferred maintenance. Forget condos and get single family homes.