Financing a condo with <50% owner occupancy

6 Replies

I saw a condo I'm interested in but it's less than 50% owner occupancy. What are my options for getting financing, what credit unions or banks or other companies should I be looking at? Either for it to be owner occupied or as a rental. Are there any options and what would be the minimum downpayment? Thanks!

No idea about Massachusetts but here in Florida lenders won't touch condos. There's actually a very short list of communities that are approved for lending. If I'm not mistaken most of the sales for condos in my area have been cash deals. I got my own condo using HomePath through Fannie Mae but that program has been discontinued. 

@Donald M.

You can contact a local bank who will usually do a portfolio loan on something like this.

However, you need to be cautious as to why you're purchasing this unit. If you can't get "normal" financing, no one else can either. Until the condo stabilizes itself, it will be cash or local lenders only, keeping values suppressed and buyer pools small. The complex likely won't see a rise in values for a significant amount of time. 

I bought my first condo just over a month ago. I'm not sure if even 1/3rd of the units are owner occupied. I use a smaller bank for most of my financing and they didn't have any problem financing it but still required me to pay for an appraisal and have 25% down just as they do with the other houses that I buy. So far I love the condo as an investment and already let the management company know that I'm interested in buying others if any come up. If interested here are the numbers on my deal: 2 bed 1 bath newly renovated condo on the water, purchased for $20k (15k financed at 4% int.) I rented it out right away without doing any work to it for $650 a month with a $650 security deposit. The taxes and insurance combined are about $100 a month, the housing association fees are $175 a month (includes some insurance, water, trash, repairs/upkeep from the walls out etc.)  The interest I'm paying is $50 a month so my total costs are $325 and my cash flow is $325 a month. Everything was recently renovated so I'm not expecting for much for repairs anytime soon.

If it's an investment property you can look for a hard money lender. Some lenders will look at the occupancy whereas others won't. Either way for both scenarios lenders will typically be at a lower LTV, from what I see here in CA it's 55%-60% LTV. But again it depends on the lender you go to.