Financing a Downtown Grand Rapids Condo
Updated: Oct 23
Financing a Downtown Grand Rapids Condo
Direct answer: For downtown Grand Rapids condo buyers, financing is a completely different world from financing a house — every building is unique, and whether your loan works depends on that building and its association, so get your financing figured out before you write an offer.
A different world
Financing in downtown condos is a completely different world. You cannot just write an offer and not have your financing figured out in condominiums.
With a house, the property is mostly the property. With a condo, the building itself is part of the loan decision.
Every building is unique
Each building is unique in that it comes down to Fannie Mae and Freddie Mac guidelines, together with the lender, on what fits. A loan might require 20 percent down, 10 percent down, or 5 percent down — and it all depends on what the building is.
What matters includes the association: has the building been sold out, does the developer still own units, how many rentals are in the building, and how old is the building? So many different things go into whether a building qualifies under those guidelines.
The warrantable question
That is where the terms warrantable and non-warrantable come in. A warrantable building generally fits the guidelines; a non-warrantable building does not, and typically requires a different kind of loan — usually a local lender and a portfolio loan.
The transcript of this video garbles the details of that distinction, so this post does not pretend to lay out exact lender rules. The point that comes through clearly is: the building decides the loan options, and the options vary widely from building to building.
Do not trust an online pre-approval alone
So do not go online, fill out a survey at a loan company, get told you were approved for a certain amount, and assume that means the building you want to buy in. An approval for an amount is not an approval for that building.
Reach out, and get connected with the right lenders in downtown — lenders who understand the buildings and the financing options for those buildings — so you are set up when you make that offer.
Key takeaways
Condo financing is a completely different world from house financing — get it figured out before you write an offer.
Every building is unique: Fannie Mae and Freddie Mac guidelines, together with the lender, decide what fits.
Down payment can be 20, 10, or 5 percent depending on the building and its association.
What matters includes whether the building is sold out, whether the developer still owns units, how many rentals are in it, and how old it is.
A building that does not fit the standard guidelines typically needs a local lender and a portfolio loan.
An online approval for an amount does not mean the building you want will qualify — use a lender who understands downtown buildings.
FAQ
Why is condo financing different from house financing?
Because the building itself is part of the loan decision — Fannie Mae and Freddie Mac guidelines, applied through the lender, decide what fits for that specific building and association.
What determines my down payment on a condo?
The building: whether it is sold out, whether the developer still owns units, how many rentals are in it, and how old it is. It might be 20, 10, or 5 percent down.
If I am pre-approved online, am I set for any condo?
No. An approval for an amount does not mean the building you want to buy in will qualify. Use a local lender who understands downtown buildings and their financing options.
Grand Rapids Downtown Condos FAQ Series
How Much Space Do You Need?
Association Fees
Renting Out a Condo
Downtown Parking
Financing Condos — you are here
Repositioning Your Listing
Watch me explain it
Here is an older video of me explaining the process. It might be older, but the info still rings true.
Watch on YouTube: https://www.youtube.com/watch?v=kYJsRD1XOWo
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Author: Steve Volkers, Associate Broker, Steve Volkers Group at Five Star Real Estate, Grand Rapids, MI — phone 616-717-2179, stevevolkersgroup.com
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