Lenders lately have tightened up mortgage approvals (which I think is far too late, this should have been occurring from the start) and have almost overnight went back to the strict qualifying standards that were once in place.
With these new tactics being enacted, it is hard then ever to get a mortgage on a condo that is going to be rented, as opposed to the owner living in the residence. The reasons for this vary from lender to lender but are typically attributed to a few things. Usually these days the mortgage lender will want a guarantee from the condo complex that it is around 65% OWNER occupied. That means if your getting a mortgage on a condo to rent, in order for that mortgage to be approved, your condo complex must have the actual owner of the individual condo living in 65% of the total condos in the complex. The thinking from the lenders standpoint is this, renters, even long term dedicated ones, do not have any true vested interest in the property, like an owner would. They also know that living in a complex with all owners who are concerned about their property and that surrounding it, will add to the value of the condo in the long run. That is the reason that some condo associations have limits to how many rental units at any given time are allowed in the complex. When buying a condo make sure to know that exact figure of non owner occupied units in the complex. This will make your decision, as well as the banks, a lot easier.
-M Petrone
Refinancing FAQ and Advice



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