Can a get a USDA loan for a condo?
This is a common question that we receive and in today’s video, I’ll explain how to get a USDA loan for a condo. Plus, I’ll walk you through what makes a condo eligible for USDA financing.
If you have a qualifying question or a loan approval that is experiencing trouble, remember that I started Metroplex way back in 2001, so let our experience be a resource for you. In addition, you can download our FREE fact sheet: USDA Condo Approval Steps.
USDA Loan for Condo
As a starting point, remember that Condominiums are a form of ownership and not tied to a specific property style or building type. If you are uncertain, the local property appraiser can be a great source to start with to help clarify any questions.
Additionally, USDA eligible area requirements will continue to apply regardless of the property type.
Further, USDA guidelines state the following:
“Condominium projects typically consist of multi-unit buildings governed by an HOA. Each unit is individually owned, and the common areas such as hallways and recreational facilities are owned by all the unit owners.”
“Although less common, it is possible for condominium projects to consist of detached or attached single family dwellings. In these cases, it is the HOA and not the individual unit owner who is responsible for maintaining the exterior of the dwellings in addition to the common areas.”
Also, even though HOA dues are generally not included with tax and insurance as part of the total mortgage payment, we must still include that monthly amount as part of the overall debt-to-income ratio.
What makes a condo eligible for a USDA Loan?
Remember that per USDA guidelines, “units in a condominium project are eligible for a guarantee if the condominium has been approved or accepted by HUD/FHA, VA, Fannie Mae or Freddie Mac” which simply means that if a condo has an existing approval through any of these agencies it could be eligible for a USDA loan.
However, because many condominiums do not have an existing approval through these agencies, approved USDA lenders may self-certify and determine the acceptability of the condominium project.
As an approved USDA lender, Metroplex Mortgage Services is able to self-certify a condo for USDA eligibility so please let us know if you have any buyers who want to purchase a condo, so we can help qualify both the buyer and the condo project for approval.
Just call or email if you have any qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions.
800-806-9836 Ext. 280
I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!
P.S. – Here are the links to check and see if a condo has been already approved by FHA, VA, or Fannie Mae: