Condos offer plenty of convenience, especially for urban residents. In cities, like the New York City — Jersey City metropolitan area where Stem Lending is headquartered, condos are often the most common option available.
Refinancing a condo in the low mortgage rate environment can help homeowners get out of higher interest mortgages. However there are gotchas to be aware of when refinancing the condo.
Refinancing a condo using a conventional mortgage differs from refinancing a traditional house in that the condo or planned unit development (PUD) project needs to be approved by Fannie Mae or Freddie Mac.
A number of condo project characteristics can render a corresponding condo units' refinance to be ineligible for purchase by Fannie Mae / Freddie Mac. This includes projects in which the condo HOA or co-op corporation is named as a party to pending litigation, or for which the condo project sponsor or developer is named as a party to pending litigation that relates to the safety, structural soundness, habitability, or functional use of the condo project.
Mortgage lenders utilize the condo questionnaire to identify if the condo project is approved per Fannie Mae / Freddie Mac guidelines.