One of the most important factors in deciding whether or not investing in a condominium is a right for you is the available financing programs. With the negative effects of the downturned economy also comes the opportunity of historically low interest rates.
Lenders’ guidelines and procedures for making loans change often and are very different for condo purchases than they are for house or land purchases. For that reason, we strongly recommend that you work with a bank or lender who makes condo loans on a regular basis. When selecting a lender, ask them how many condo loans they’ve made in the past year. If they haven’t made any condo loans in the past year, or have only made only one or two, there’s a higher chance that financing a condo purchase through that lender might cost more to obtain, take longer for approval, or not be approved at all.
We want your transaction to be smooth and we are happy to provide a list of local lenders who have experience and working knowledge of the many options for condo financing that are currently available.
Conventional Mortgage Lending
Conventional Mortgage Lending is the most common way that real estate purchases in Tuscaloosa are financed. Conventional lenders will generally require a 20%-25% down payment. Within a few months of making a Conventional mortgage loan, most lenders will sell the loan to an investor, but will continue to administrate or service the loan until it is paid off or refinanced.
Portfolio Lending
These mortgage loans are made by banks who do not plan on re-selling the loan to an investor. Portfolio loans can sometimes allow down payments of less than 20% for some buyers. Lenders often couple these loans with special programs for buyers with certain occupations or lifestyles. We track portfolio lending programs offered by lenders and banks and will be happy to help you search for any portfolio lending programs that you might qualify for.
Builder Financing
If you are not able to qualify for Portfolio lending or Conventional lending but can make a down payment of 20%-25%, we can sometimes make arrangements for Builder Financing on select units. Call us today to find out more!
Fannie Mae/FHA Loan Programs
Due to regulatory changes, the FHA currently excludes all condo projects in Tuscaloosa (including the Summit) from FHA Loan programs (e.g. Fannie Mae and Freddie Mac.)