Being a cash buyer of a Steamboat Springs condo is simple. But what about buyers who want to take advantage of low prices and low interest rates and finance their condo? Oh boy…..things can get complicated real quick.
The reality of today’s market is that the condominium development has to get approved before the condominium buyer is approved. And no matter how high a borrower’s credit score is or how many assets a borrower has, the fact is that some Steamboat Springs condo developments are not able to be financed in today’s lending environment.
The good news is that banks vary as to what developments they will finance. All have different underwriting rules, so some Steamboat condo developments may be allowed with certain lenders.
Here are three reasons Steamboat condominium developments may be turned down:
- Occupancy Rate – this is the percentage of owners who actually live in the complex vs. investors who rent their condos out. Typically, lenders want to see 51% or more owner occupants.
- HOA Delinquency Rate– the percentage of overall owners who are delinquent on their HOA dues. Anything over 15% delinquency is a red flag to the lender.
- Litigation– is the development involved in litigation? If it is, it’s going to be very hard to finance.
- Time Shares—Some Steamboat developments have a few condos that have been split into fractions or timeshares. Others allow timeshares in their governing docs, even though none of the condos have been split into fractions. Anything that has to do with the property and says “timeshare” or “fractional” is not good.
(These Steamboat condo developments all had sales in January where the buyer financed the condo: Fish Creek Hill, Walton Village Condo, Wildhorse Meadows – First Tracks, Storm Watch @ Steamboat, Sunray Meadows, and Pines at Ore House.)
A few ways to get around the lending issue:
- Use a local Steamboat lender. Our lenders generally know if the condo might have any issues. If they can’t do a loan, they will refer someone who can.
- Get a HELOC on your primary residence.
- Use a Steamboat bank who will make a portfolio loan.
- Consider owner financing.
- Pay cash.
Interested in purchasing a Steamboat condo or seeing if financing is available? Please call 970.819.6372 or contact us with your questions.