One of the government –run mortgage companies in Canada has revised its requirements which are related to condos and large or multi-family residential units/homes mortgage. The changes advised by the mortgage firm have a few impacts on condo buyers as the loans which can not be guaranteed or purchased by the former company are difficult and more expensive to get in the mortgage market.
The policy suggested needs the valuation by the associations of condos. Other then these, the borrower’s credit qualifications are evaluated. The government agencies have some requirements in reference to condos’ association insurance, receivables that are due by residents and the ownership breakdown of the units in the whole condo complex. Certain aspects that might cause issues in condo mortgage include:
- most of the residents have not made their loan payment and are due
- multi-family condo complex has hotel units in addition to the units owned by residents and such complex is designed for commercial purpose as well as a large space is occupied for that purpose
- A single owner more then 10% of the units of the complex
- Condo association has lesser cash reserves and insurance coverage
Condo buyer can get the mortgage as the real estate agents help them to provide pre-qualified building while they get its financing but this way is more expensive, if the buyers deal does not fall with in the specific gov-run mortgage firm.