Fanny Requires signed Lease?

[Jared MontBlanc]

BP friends, I need some advice. I just bought my second vacation rental with Cash after told the day of closing that the HOA said the occupancy rate for the condo plex was >50% rentals, and they couldn't finance using Freddy or Fanny underwriting. Before it was dead, we discussed whether my other house had a lease rental agreement in place, which if so, would allow this condo to be purchased as a second home rather than investment. Issue being, it's a vaca rental without a lease and doesn't qualify as an "investment" property per requirements. I want to get financing on this and am talking with a local lender now, but the question just came up again during underwriters eval. I'm thinking about creating a lease to my house manager (cleaner) to fulfill this requirement since in essence, she is using the house weekly. This is obviously a bit grey and wanted to ask advice of anyone here on what I should do. If I can't, seems I can not repay the cash loan and will need to open a Heloc, which is don't really want to do. Appreciate the advice, Jared

[Christopher Phillips]

@Jared MontBlanc

The issue is that the complex is >50% rentals. Most banks want to stay away from this.

It's what they call a non-warrantable condo. Either a single person/entity owns more than 10% of the units, or more than 51% of the units are non-owner occupied, and a few other hot button issues. Another one I run into would be one bank holds the majority of the loans in the complex.

Fannie won't buy non-warrantable loans. So, you would have to find a bank that would be willing to take it on.