Warrantable vs Unwarrantable

If you want to sell your condo or townhouse, good luck if it’s not warrantable.

The same is true for those looking to buy because lenders are diving deep into HOA finances and many are not meeting the standard.

Here’s what you need to know:

This information was shared to me by a lender I work with, Emad Bertan.

• No More Easy Reviews: Streamlined "Limited Reviews" are gone. Every conventional buyer now triggers a deep-dive audit of the HOA's finances.

• 15% Reserve Requirement: HOAs must now save at least 15% of their budget for reserves (up from 10%). If underfunded, the loan is immediately denied.

• Delinquency Cap: No more than 15% of units can be behind on HOA dues.

• No Deferred Maintenance: Major deferred repairs or master insurance deductibles over $50k per unit will block financing.

• The Only Good News: The 50% investor/renter cap has been eliminated for established buildings. So having a high percentage of renters in a building is no longer an automatic deal-breaker.

Never say never:

One thing I’ve learned in real estate is that there is always a way to get a deal done. In this case, you can shop the deal around to certain lenders and some may approve financing if you put down a larger down payment, etc.

Nonetheless, it’s something to know ahead of a purchase or before you try to sell.

And for those looking to sell, this could be a great time to think through the BUY RENT BUY strategy. Instead of struggling to sell your condo/townhouse because of HOA requirements, could you tap into you equity with a HELOC, rent out your current unit, and buy again?

Crunch your numbers and find out if you can rent out your home and buy again.

Here’s a warrantable deal:

Of course I am going to take this opportunity and plug the amazing 2 bed, 2.5 bath unit I am selling in Valencia, CA in the Cheyenne Community. Not only is this property warrantable, but it is also FHA and VA approved.

AND we just lowered the price to $549,900.

Open House this weekend Saturday 11-2 pm and Sunday 2-5 pm.

Thanks for being here! See you next week 👋