What sets us apart is our ability to help you secure financing where other lenders may experience certain limitations. Our industry-leading banking platform paired with our in-house Condo/Co-op Department, makes us your best choice for all your condo needs. We are here to navigate you through common obstacles and provide the best loan options available in the country.
What exactly is a condo?
Properties where homeowners live and share a common area which is maintained by a Homeowner’s Association are commonly referred to as a condo or co-op. When applying for a mortgage on your condo the lender must approve the borrower and the condo project to close on your loan. Most lenders have strict requirements that limit their ability to finance condos because of a variety of common HOA challenges.
Common Condo and Homeowner Association (HOA) Challenges We Can Resolve
We are experts at helping home buyers overcome some of the most common condo and HOA issues that may arise when going through the loan process. Below are a few of the most common issues we have resolved for our customers.
Owner vs. Rental Percentage
Many condominiums are more than 50% rented. This means that a building has more units being rented than occupied by condo owners. When a building has more than 50% of its units rented, some lenders cannot offer all of their available loan products.
Insufficient Reserves for the HOA
Homeowner Associations are run like a business and they must issue a yearly budget including revenue, expenses and reserves. Some lenders have restrictions regarding the minimum balance in the HOA reserve account to consider a loan.
Single Entity Ownership
Most lenders will not lend in a condo building if a single entity, investor, or individual owns more than 10% of the total units in the building.
Commercial Space
If a condo building has more than 25% of the building’s total square footage devoted to 
commercial space, such as restaurants, office space or retail, most lenders will have trouble getting financing approved.
Warrantable Condo
The Federal Savings Bank has determined that the project meets the guidelines for traditional mortgage loans. Traditional mortgages are commonly referred to as “Conventional, Jumbo or Government (FHA and VA)” type of mortgages. In a warrantable condo building the most competitive mortgage options are available for borrowers
Non-Warrantable Condos
When after the review it is determined that the project does not qualify for a “traditional mortgage”, due to common HOA challenges such as those listed above, the project is designated as a non-warantable condo. The Federal Savings Bank has unique financing solutions for all non-warrantable projects due to our special portfolio products and common sense lending platform.
Co-ops
A cooperative project (co-op) is a multi-unit apartment/condo building where each resident has an interest in the building. In a co-op, a resident does not own the individual unit, but they own a share of the building in stock certificates equal to other owners, enabling the owner to occupy an unit. .
Planned Unit Development (PUD)
A Planned Unit Development (PUD) is a project or subdivision that consists of single family homes, town homes or condos with common property and improvements that are owned and maintained by a Homeowners Association (HOA) for the benefit and use of the individual PUD units.
All bankers at The Federal Savings Bank are equipped to assist financing your condo, if you are currently working with a Banker please click here to find your banker.
If you’re an HOA, broker or listing agent that needs help with financing options visit our HOA Services page.
If you are a Developer interested in learning more about our the projects we have helped secure financing options, visit our Developer Services page.
