Right now, this is a rumor, but when I hear rumors like this, I’m pretty sure it will happen:
Effective 10.2.09, you will be required to put 15% down on a condo for a conventional loan. FHA loans still allow for the minimum of 3.5% down, but there are stringent development requirements on condominium projects, which makes it very difficult to get a loan through if it is not already FHA-approved. (Also, the seller may flat-out reject your offer if you only qualify for an FHA loan on a condo, since FHA condo requirements are so strict).
As a side note, if you’re seeking information online or from an online bank, make sure that they’re aware of the rules pertaining to the state you are buying in. California is a declining market and thus does not allow for 10% down come October 2nd.
Here are the changes that we’re expecting in the industry in regards to the latest down payment guidelines for conventional loans (FHA remains 3.5% minimum):
Up to $417k Loan Amount:
SFR/PUD: 10% down minimum
Condo: 15% down minimum (effective 10/2/09)
$417k – $729,750 Loan Amount:
SFR/PUD: 15% down payment
Condo: 15% down payment
$729,750+:
SFR/PUD: Call me; there are too many variables for FICO and exact loan amount
Condo: If this is your loan amount range, I hope you’re not in the market for a condo! 🙂
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