Fannie Mae Condo mortgage rules

[J Zhang]

Hi, I've seen several posts on how FM condo rules potentially affect the selling of condo units. I've checked FM website and read the rules however I am unable to find the exact definition of Condo by FM. I saw a lot of conflicting information on the Internet about whether condo is a type of RE ownership or just a bunch of units sharing walls. I have a fee simple townhouse (with defined property boundary of my unit), it shares walls on both sides and has a HOA. Can it be regarded as a condo in FM's book?

[AJ Wong]

HI Jin, what are you attempting to determine? Whether a condo is warrantable or down payment requirements and terms structuring? 

For conventional financing, condos need to be 'warrantable' if the condo or HOA doesn't meet those guidelines it is 'non-warrantable' and there are alternative or Non-QM (non conventional) lenders that offer financing. Usually slightly more down payment but possible. Check in with @Joseph Chiofalo for lender questions, he's a condo guru based in SoFLA. Good luck. 

[Russell Brazil]

A properties type of ownership generally falls into 3 types of ownership. Condos, coop, and fee simple. All of these describe a type of ownership, and not a building style. A property that looks like a townhouse coupe be any of these 3. I live in a property thst looks like a tow house, but it is a condo.

[J Zhang]

Quote from @AJ Wong:

HI Jin, what are you attempting to determine? Whether a condo is warrantable or down payment requirements and terms structuring? 

For conventional financing, condos need to be 'warrantable' if the condo or HOA doesn't meet those guidelines it is 'non-warrantable' and there are alternative or Non-QM (non conventional) lenders that offer financing. Usually slightly more down payment but possible. Check in with @Joseph Chiofalo for lender questions, he's a condo guru based in SoFLA. Good luck. 

Thank you AJ. I am just trying to determine if the townhouse I have would be considered a condo by Fannie Mae. We bought it because it has a fee simple title with its own lot boundary. I just want to make sure this is not considered a condo and subject to the warrantable rules when I want to sell. 

[J Zhang]

Quote from @Russell Brazil:

A properties type of ownership generally falls into 3 types of ownership. Condos, coop, and fee simple. All of these describe a type of ownership, and not a building style. A property that looks like a townhouse coupe be any of these 3. I live in a property thst looks like a tow house, but it is a condo.

I'm pretty confused on this topic. I thought fee-simple, lease hold and life estate etc. as types of ownership, and condo and co-op are created using other legal instruments. But my knowledge is sketchy in this area anyway. Interestingly, when I searched "condominium in fee simple", there are several discussions on the topic, including this one on "Appraisersforum.com". 

https://appraisersforum.com/forums/threads/how-is-a-condo-fee-simple.163799/

[Russell Brazil]

Quote from @J Zhang:

Quote from @AJ Wong:

HI Jin, what are you attempting to determine? Whether a condo is warrantable or down payment requirements and terms structuring? 

For conventional financing, condos need to be 'warrantable' if the condo or HOA doesn't meet those guidelines it is 'non-warrantable' and there are alternative or Non-QM (non conventional) lenders that offer financing. Usually slightly more down payment but possible. Check in with @Joseph Chiofalo for lender questions, he's a condo guru based in SoFLA. Good luck. 

Thank you AJ. I am just trying to determine if the townhouse I have would be considered a condo by Fannie Mae. We bought it because it has a fee simple title with its own lot boundary. I just want to make sure this is not considered a condo and subject to the warrantable rules when I want to sell. 

 You already answered your own question. If it's fee simple, it is not a condo.

[Joseph Chiofalo]

Hi Jin, 

That information should be in the master association documents you should have received when purchasing the property.  

Some townhomes are governed as a condo in FL according to association documents.