Non-warrantable condo mortgage

[Jash Sayani]

Hi,

I have been looking at properties in Florida for rental. I see that most condos are non-warrantable (more than 51% rentals) and hence Frannie Mae or Freddie Mac will not buy them. Hence they are non-warrantable.

I need to get a pre-approval for mortgage to bid on the condos. Do the big banks (Wells Fargo, BoA, US Bank, etc) provide non-warrantable mortgages, and if they do, are the rates higher than conventional mortgages?

Also, is it advisable to buy a non-warrantable rental property?

Thanks.

[Stephanie Medellin]

@Jash Sayani  There are non-warrantable condo loans available, but as you're finding, they're not quite as easy to find.  The fastest way to find them locally would be to ask your Realtor or other agents who have listings in the building where their clients have obtained financing.  A local mortgage broker would also be a good source for these types of programs.

As far as whether or not it's advisable to buy a non-warrantable condo, consider that for resale purposes it might be more difficult to sell in the future because of financing.  That being said, I know very little about the Florida market, so if units are selling quickly at prices comparable to other complexes and the numbers make sense, it could be a great investment.