We obtained a combo loan — consisting of two loans — for our client to purchase a non-warrantable condominium in Miami, Florida as her primary residence.
Our client was facing several challenges when she first met us.
First, she was previously turned down by another lender because the underwriter discovered that the condominium association lacked sufficient reserves.
Second, her deadline to close under the purchase agreement was around the corner.
We were able to place her with a different lender that allowed a streamlined review of the condo association:
Unlike a full review, a streamlined review of a condominium project is less rigorous.
Therefore, the association’s lack of reserves was not an issue.
The tradeoff of a streamlined review is a limitation on the maximum loan-to-value (LTV).
However, we creatively structured her scenario by giving her two loans — a first-position mortgage and a second-position home equity line of credit — for a combined LTV (CLTV) of 89.99%.
Because we kept her CLTV under 90%, we were still within Freddie Mac’s eligibility parameters for a streamlined condo review.
Ultimately, we were able to obtain an extension of the closing date, and our client closed with a 2.875%, 30-year fixed rate on her first mortgage, and a HELOC to tap into for emergency funds as necessary. We obtained a low interest rate for her because she was able to fully document her income through tax returns.
Are you looking to purchase or refinance a non-warrantable condominium? Does the HOA have financial issues such as lack of sufficient reserves or pending litigation? We can help. Contact us today to discuss your scenario.
