Primary/Non-Primary Residences Ratio - Condo financing

[George P.]

Can someone explain what ratio(s) the banks are looking for when underwriting a loan on a condo (i.e. number of rentals vs. primary residences)? Where are they deriving these numbers from - public records?
Also, Is it only for FHA loans or conventional financing as well?

Thank you!!!

[Cheryl C.]

The condo association can give you the current ratio's. HUD has a web site were you can put in the condo name and see if they are "approved". Bear in mind that the approval may not be renewed. I'm not completely clear on "conventional" requirements, but my guess is that they are tighter than HUD. If I remember correctly, HUD is 50% but some conventional is 33%. It's self-perpetuating and just results in more and more investor-owned as owner-occ's can't get financed.

I talked to Wells last week about a conventional investor refi on a condo THAT MEETS the guidelines and was told that Wells no longer offers refi's to any investor owned condo's - regardless of the investor ratio. I have a portfolio lender that does make loans. The problem is that you should be quite long-term as I don't see retail buyers getting loans anytime soon in these heavily investor developments. My exit stratedgy is owner financing, if necessary.