With our current market conditions in Minnesota there are some differences when financing condominiums and townhomes.
Condos require a minimum of 10-15% down right now in order to get mortgage insurance on a conventional loan. Each mortgage insurance company has different rules on what they will allow. If it is a declining market or a restricted market, RMIC requires 15% down on condos and attached homes, MGIC requires 10% down. MGIC will allow 5% down on a townhome if you are a first time homebuyer, but still requires 10% down on condos. Most mortgage insurance companies are requiring 10% down for anyone buying a home where the mortgage requires private mortgage insurance.
FHA will allow both condos and townhomes, however condos should be FHA approved. There is a list available on FHA's website that shows approved condos. It is possible to get a "spot approval" through FHA, however it will depend on whether the condo meets specific guidelines and if the lender will allow spot approvals.
Many townhomes look like townhomes, but legally they are condos. Several builders built projects using condo guidelines and so those properties must use condo guidelines when you are purchasing them. Your real estate agent can help you determine if it is a condo or a townhome.
Leslie Vanderwerf, Advisors Mortgage - lvanderwerf@advisorsmtg.com – Website
According to the current financial condition the real estate business is in demand .
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