By Michael Most
Although Fannie Mae has a strong hold on mortgage guidelines, there are still options available for buildings that do not meet their requirements. These projects are referred to as “Non Warrantable”
Major banks have portfolio products which are used to keep the security of such loans on their balance sheet. When banks have this sort of liquidity on hand, they can make their own rules and circumvent many of the Fannie/Freddie requirements.
If you’re concerned a lender will decline your portfolio, there are several “compensating factors” that can help you get approval. You’re more likely to be approved by a lender if the building you’re buying into meets any or all of the following criteria
- The building has a 10% budget for major repairs
- There’s no pending litigation
- The building maintains less than 30% commercial space
- A single entity does not own more than 10% of the building’s units
You stand a better chance when the building meets three of the four criteria above and only requires an exception for one. That said, there’s no blanket rule and there are often unique exceptions made based on personal factors. Given the unpredictable and unruly nature of the beast, it can be very helpful to contact a mortgage broker to go over the specifics of the your personal finances and the specifics of the building you’re looking to buy into. When seeking a mortgage broker, be sure to ask if he or she has experience with local Non Warrantable projects.
3 Comments
Check in your payment beoklot, or your monthly payment statement and call the telephone number for customer service (usually a toll free number). Make a note of the name of the person you speak with. Give your loan number and ask if they own your loan or if they are servicing it. If they are servicing it, ask who owns the loan.I believe you are entitled to know who owns your loan, so if there is hesitancy to answer.you may want to ask to speak w/a supervisor. Just explain that you would like disclosure of this information. There really shouldn’t be a problem.Since you bought your house have you made payments to companies that have changed? I bought my house 4 1/2 years ago and have made payments to 4 different companies. Wells Fargo is the company I currently make payments to. In my case, Wells Fargo may actually own my loan now. Hmmm, maybe I should check on this also.Please post your experience here. -2Was this answer helpful?
Remember, lenders are looking for a debt-to-income ratio that’s lower than 36%. So, as long as all of your debts (including the new mortgage that you’re applying for) make up less than 36% of your annual gross income (what you make before taxes), you’re likely to get approved.
MORE ON WHAT LENDERS WILL ASK:
http://www.realtypin.com/news/Story/716-What-Will-a-Mortgage-Lender-Ask-You