Buying a Florida condo? What lenders check before you make an offer
A condominium loan depends on the building as well as on you. Here is what gets reviewed and how to avoid a late surprise.
The building is part of the loan
When you buy a house, the lender mostly evaluates you and the property. With a condominium, the lender also looks at the condominium project itself. A strong buyer can still run into trouble if the building does not meet the lender's requirements.
What gets reviewed
Florida has added building-safety and reserve requirements for many condominiums in recent years, which means lenders are paying closer attention to these questions than they used to.
- The association's finances, including its reserves and how it plans for major repairs.
- The condition of the building and any required inspections or repair projects.
- Pending lawsuits involving the association.
- How many units are owner-occupied versus rented, and how many owners are behind on dues.
- Insurance coverage carried by the association.
How to avoid a late surprise
Talk to a lender before you write an offer on a condominium, not after. We can look at the project's details early and tell you whether it is likely to be financeable. Different loan programs have different project rules, so a building that does not work for one program may work for another.
Ask the seller's side for the association's recent financial statements and any notices about upcoming special assessments, and review them with your lender and agent.
Talk it through
Every condominium is different. A licensed originator can walk through the specific building with you. There is no obligation to ask.
Questions about your situation?
Tell us about your loan and a licensed originator will follow up. There is no obligation to ask.