Just ten years ago, buyers had many more options when looking to invest $200 K in the Austin real estate market. The median sales price of residential homes in 2008 was only $192,000.
What You Need To Know When Purchasing A Condo In Austin Texas
Condominium buildings are either warrantable or non-warrantable. It is important to know the difference between the two types when you are purchasing a condo, and imperative to know the difference when you require financing to purchase the condo. A condo is warrantable when a loan used to purchase a condo can be sold to Freddie Mae/Freddie Mac. Conversely, a non-warrantable condo is one in which the loan used to purchase the unit cannot be sold to Fannie Mae/Freddie Mac.
If you are considering purchasing a non-warrantable condo, that does not mean that you cannot use a loan to do so. However, you will want to make sure your lender is able to provide a loan for a non-warrantable condo. Also, in most cases, lenders require a larger down payment when purchasing a non-warrantable condo. A lender can help walk you through these intricacies when you are financing a condo.
However, first, I’m sure you want to know what exactly makes a condo non-warrantable. The Federal Housing Finance Agency (FHFA) determines the guidelines that define which loans can and cannot be sold to Fannie Mae & Freddie Mac. The FHFA is a regulatory agency; therefore, loans that are non-warrantable are considered riskier by the FHFA. However, these guidelines are not black and white. Sometimes, a condo project has an element that makes it non-warrantable. However, purchasing that condo is not necessarily a risky investment. In fact, both Fannie Mae and Freddie Mac occasionally make exceptions to the eligibility requirements based on specific property attributes or economic conditions.
Generally speaking, the following factors determine the warrantability of a condominium complex:
If a condominium development is involved in any kind of lawsuit, it is unlikely that the condo units will be warrantable. There are a number of additional variables that determine if a condo is warrantable. For more specific information on Freddie Mac’s requirements, click here. For more information of Fannie Mae’s requirements, click here. If you are looking for a condo in Austin, give me a call today. I’d love to help you navigate the Austin real estate market!
Erika Rae Albert is an Austin native who has built her business around one guiding principle, YOU always come first. Prior to joining the real estate industry, she honed her her customer service s....
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