Suppose you are considering buying an apartment, walk-up, or a unit in a multi-family complex. In that case, you should first determine if that property qualifies for FHA, Veterans, or Fannie Mae Conforming loans. These tend to have lower interest rates than "non-conforming" or portfolio bank loans.

Usually, when a new condominium or multi-family housing complex is built, the developer requests approval from these agencies to qualify for this type of loan. However, it is up to the management or the Condominium and Resident Board to continue applying for renewal each time it expires.

To obtain Fannie Mae Conforming loans, the bank provides the buyer with a questionnaire to be completed by the management of the condominium or housing complex, which is well known to condominium managers. Based on the answers, Fannie Mae determines if the loan can be approved for that transaction. For example, some items asked in the questionnaire are existing insurance for the common areas, whether there are any claims against the condominium, and the most common use of the condominium (condo-hotel, primary residence, rental), among others. Then, based on these answers, the agency determines if the condominium is authorized to use the conforming loans.

The time it takes to close this type of loan will depend on how quickly the condominium management answers the questionnaire. Suppose you are thinking of buying an apartment or walk-up. In that case, you should first find out if the condominium or housing complex qualifies for a loan of this type since it can represent considerable savings in your mortgage due to lower interest rates.

To learn more about this topic or before starting your mortgage process, at Oriental, we are more than ready to serve you. Click here or call 787.777.2272.