non warrantable condo refinance

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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
3y
Quote from @Ravinder Gade:

I have non warrantable condo (paid full cash to acquire) .  having long-term tenant since last 3 years

Now I am thinking of refinancing for other potential investment opportunities. 

what are my options?  any lenders who finance non-warrantable condos in NJ ?

An asset is appreciated to 185k 


DSCR Loans should be a good option for you - while guidelines and offerings sometimes mirror conventional/fannie/freddie, most DSCR lenders have move toward having no distinction in pricing and eligibility for condo investment properties warrantable vs. non-warrantable

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  • Ryan Muska
    Lender · Saddle Brook, NJ · Member since 2023 · 431 posts · 231 votes
    3y

    I've done non-warrantable condos. It all depends on the reasoning behind it being non-warrantable. What is the reason you think it is?

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  • Jason WrayPro Member
    Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
    3y

    Ravinder,

    You can use a protfolio program and take out 75% LTV cash out. Non-warrantable is generally an easy situation since its relatd to the basic overlays that mot lenders carry. Occupancy rating, Owner versus renter ratio, reserve balance, "Airball" meaning condo/HOA does not own the land it sits on or 100 year lease the list goes on even litigation is still acceptable.

    [email protected]727-637-4289
    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Ravinder Gade:

    I have non warrantable condo (paid full cash to acquire) .  having long-term tenant since last 3 years

    Now I am thinking of refinancing for other potential investment opportunities. 

    what are my options?  any lenders who finance non-warrantable condos in NJ ?

    An asset is appreciated to 185k 


    DSCR Loans should be a good option for you - while guidelines and offerings sometimes mirror conventional/fannie/freddie, most DSCR lenders have move toward having no distinction in pricing and eligibility for condo investment properties warrantable vs. non-warrantable

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    11Reply
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    3y

    Hey Ravinder - 

    There are lenders who will allow non-warrantable condos for a cash out refinance. Feel free to connect. 

    [email protected]330-354-6590
    Brittany Minocchi - Barrett Financial Group, LLC522 Reviews
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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 514 votes
    3y

    @Ravinder Gade, There are lenders that do cash out refinances for non-warrantable condos and condotels that are rentals as DSCR loans. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    [email protected]818-770-0340
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  • Stephanie MedellinBusiness Member
    Mortgage Broker · CA · Member since 2014 · 1k+ posts · 644 votes
    3y

    There are plenty of lenders who will lend on non-warrantable condos, and each has their own requirements.  Your best bet is to use a mortgage broker who has access to various lenders.  You are unlikely to find these loans at a bank.  Buildings with structural litigation / lawsuits against the builder, particularly those without a definite dollar amount to fix, are extremely hard to finance.  Other issues may have resolved since you purchased the unit, like one person or entity owning too many units.  What is the reason you believe it's non-warrantable?

    [email protected]
    Stephanie Medellin, Loan Factory58 Reviews
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