Redondo Beach, CA · Member since 2015 · 4 posts · 1 vote
Hello everyone,
I'm in California and I own a condo as an investment property that is part of a 3-unit condo with an HOA. I rent my unit out and the other units are owner-occupied. Right now all of us are fine since we meet the 51% owner-occupied guidelines for Fannie Mae and Freddie Mac in regards to warrantable loans.
Question:
If another unit decides to rent out his/her place we would obviously go below the 51% owner-occupied threshold. At that point, if one of the investment property owners decided to sell would prospective buyers (assuming the prospective buyer would live in the unit) qualify for a warrantable loan? Since in this case after the buyer purchases the unit it would be 2 units that are owner occupied and 1 unit that is an investment property.
@Aaron So if you own a condo in a 2-4 unit complex then the Fannie Mae condominium review is waived. There is no review, thus no ownership requirement, for a condo complex of that size.
@Andrew Postell Thanks for the reply, Andrew. Does this apply to Freddie Mac as well? And just to confirm, does that mean prospective buyer should have access to warrantable loans?
@Aaron So unfortunately Freddie Mac will follow the 50% unit occupied by owner rule. So in your above scenario if another unit owner did decide to rent then that would fall below the 50% rule. But having Fannie Mae as a servicer means you do have a warrantable condo to Fannie Mae. Hope this helps!