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Creative Non-Warrantable Condo Purchase Loan for Recent College Graduate

On behalf of a first-time home buyer and recent college graduate, we obtained a purchase loan and a home equity line of credit to allow her to purchase a non-warrantable condominium in North Miami Beach. 

The borrower was initially turned down by her bank, but we stepped in to get her approved by another lender.  As a recent graduate, she had limited work history, but we were able to get the lender to approve her based on her diploma, employe offer letter, and just one year of tax returns.  We also were able to get the lender to approve a free appraisal (a savings of $440), and to allow her to use gift funds from her family to help pay for the closing. 

Another challenge was that the borrower needed a total of 90% loan-to-value (LTV).  However, due to the special guidelines for Florida condos, the lender was limited to providing only 75% LTV.  We came up with the creative solution of getting a second lender to provide a second mortgage at 15% LTV.

Ultimately, we obtained for her (1) a 30-year fixed mortgage at a 4.375% interest rate under Freddie Mac’s Home Possible program at 75% LTV; and (2) a home equity line of credit at an interest rate of prime plus 1.24% at 15% LTV. 

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