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.
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
8y
@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.
Redondo Beach, CA · Member since 2015 · 4 posts · 1 vote
8y
@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?
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
8y
@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!