Provincetown Real Estate: Buying a condo in an association with commercial influence??

If you are planning on buying a residential condo in an association with commercial influence (units owned and occupied by a non-residential owner), be aware that lenders frown very heavily!

I have a condo listed for sale in an association where the commercial influence is about 40%. The lender I use and trust warned me that any Buyer must put down a minimum of 20% liquid cash, have a credit score of 720 or higher, the condo association must have been turned over to the association at least 5 years ago and have a healthy reserve. Even if the Buyer meets that criteria, there is a chance the lender will not want to finance the unit under the newer stricter guidelines.

My lender mentioned that there is a chance the lender will finance it as an unwarrantable condo. But, then the interest rate is higher. A lender will consider lending in an association if the commercial influence is 20% or lower. If you are unsure of the percentage ownership, consult the condo documents and/or ask your Real Estate Attorney.

Bottom line, if the home you find and love is in an association with commercial influence of more than 20%- have a long talk with your lender and have as many facts as possible about the association to give to the lender.

If you have any questions about this type of situation, please feel free to call me at 508-487-6002 or e-mail me at Rick.Tourgee@Century21.com. Also, should you wish to take a peek at properties for sale here on Cape Cod, please visit my website.