A more “normalized” housing market is on the horizon: NAR

1. FHA Loan (Federal Housing Administration Loan) Credit Score Requirement: As low as 500 (with 10% down) or 580+ (with 3.5% down). Best For: First-time homebuyers and those with lower credit. Pros: Low down payment, flexible credit requirements. Cons: Requires mortgage insurance premiums (MIP). 2. VA Loan (Veterans Affairs Loan) (For eligible military members & veterans) Credit Score Requirement: No official minimum, but lenders may require 580-620+. Best For: Veterans, active-duty military, and qualifying spouses. Pros: No down payment, no private mortgage insurance (PMI), competitive interest rates. Cons: VA funding fee required. 3. USDA Loan (United States Department of Agriculture Loan) Credit Score Requirement: 580+ preferred, some lenders may allow lower. Best For: Buyers in rural or suburban areas with low-to-moderate income. Pros: No down payment, lower mortgage insurance costs. Cons: Must meet income and location eligibility. 4. Subprime or Non-Qualified Mortgage (Non-QM Loans) Credit Score Requirement: 500-620+ (varies by lender). Best For: Borrowers who don’t qualify for conventional loans. Pros: Flexible underwriting standards, alternative income verification. Cons: Higher interest rates and fees. 5. Conventional Loan (With a Non-Traditional Lender) Credit Score Requirement: Typically 620+, but some lenders allow lower with compensating factors. Best For: Borrowers with a higher down payment or strong income history. Pros: No upfront mortgage insurance if you put 20% down. Cons: Stricter credit requirements, PMI required if <20% down. Tips to Improve Mortgage Approval with Low Credit Increase your down payment (higher down payments can offset low credit). Work on improving your credit score before applying. Look for lenders specializing in low-credit borrowers. Consider a co-signer or joint application with someone with better credit. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329 I

The difference between warrantable and non-warrantable condos primarily relates to whether a condominium project meets the eligibility requirements set by Fannie Mae, Freddie Mac, or other government-backed entities like the FHA (Federal Housing Administration) and VA (Veterans Affairs). These classifications impact the availability of financing for buyers. Warrantable Condos A warrantable condo meets the lending guidelines set by Fannie Mae and Freddie Mac, making it easier for buyers to secure conventional financing. To be considered warrantable, a condo project typically must meet the following criteria: Owner-Occupancy Ratio – At least 50% of the units must be owner-occupied or second homes (not rentals or investment properties). HOA Financial Health – The homeowners' association (HOA) must have sufficient budget reserves (at least 10% of the annual budget). No Litigation – The condo project must not be involved in major litigation that could affect its financial stability. Commercial Space Limits – No more than 35% of the building can be used for commercial purposes (like retail or office spaces). Single-Entity Ownership Limits – No single entity (like an investor or company) can own more than 20% of the total units. Project Completion – The development must be fully completed (not under construction or in a phased build-out). Non-Warrantable Condos A non-warrantable condo does not meet one or more of the guidelines above, making it riskier for lenders and harder for buyers to secure traditional financing. Common reasons a condo is considered non-warrantable include: A high percentage of investment units (e.g., more than 50% of units are rented out). The HOA has low reserves or is financially unstable. The condo is involved in litigation, especially if it affects safety or structural integrity. A single investor owns too many units (e.g., one person owns more than 20%). Excessive commercial space within the building. The condo is in a new development or still under construction. Financing Differences Warrantable condos qualify for conventional loans backed by Fannie Mae and Freddie Mac, often with lower interest rates. Non-warrantable condos may require portfolio loans, jumbo loans, or non-traditional lending with higher interest rates, larger down payments, and more stringent requirements. Why It Matters If you're buying, a warrantable condo is easier to finance with better loan options. If you're selling, having a warrantable condo increases the pool of potential buyers. If you're an investor, a non-warrantable condo might provide rental income opportunities but may require cash or specialized financing. Tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329