Condo Owner Occupancy Question - HELP!
I am considering buying a condo unit in a building that is roughly 70% owner occupied. I am hearing that if owner occupancy drops below a certain percentage, Freddie Mae can’t be involved in a loan. So, if a few people move out, I could potentially find myself unable to unload the unit, even if…
I am considering buying a condo unit in a building that is roughly 70% owner occupied. I am hearing that if owner occupancy drops below a certain percentage, Freddie Mae can’t be involved in a loan. So, if a few people move out, I could potentially find myself unable to unload the unit, even if I have a buyer because that buyer couldn’t get a loan. Is that true? What’s the percentage? Thanks so much.
There are lenders out there that do not follow fannie or freddie guidelines and do not have this requirement, depending if the condo is an established or not. If the unit is being purchased as an investment property then 51% must be owner occupied. It sounds as if your building is established. Any questions feel free to contact me:
Evan Hilaire
Director of Business Development
The Remus Group LLC.
48 Wall Street, 11th Floor Suite 20
New York, N.Y. 10005
212.918.4974 Direct
212.918.4430 Fax
866.281.1688 E-Fax
Evan@theremusgroup.com
When I bought my first coop in 2003, the banks were looking for 50% or more owner occupancy. When I sold in 2009, they were looking for 75% or more. Not sure if this varies between condo and coop, but I think this number is variable depending on the market. That building (16 units) had very strict sublet policies for that reason.
Yes it’s true – in theory. Fannie and Freddie can make exceptions though. Ask your broker if you can contact the condo board president and ask if they are doing anything to address this. I know my condo board is acutely aware of this requirement and is closely monitoring the number of rentals in the building. A building that has few if any renters is apparently more attractive to other owner occupiers. Also, once a building is a rental in all but name, banks view the loan as a commercial loan.
Key ingredient I left out. The building is sold out, it is a resale.