Campbell, California - Condo Conversion .. having problem with lender underwriting

[lifeislife]

State: California

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There is a condo conversion project and I am in the process of buying one unit there. Two lenders I talked to, are unwilling to underwrite the loan because the project is not approved by Fannie/Freddie yet.

The management company is saying that they will apply for approval after all units are occupied.

So I have a few questions:

1. How long does it take for approval from Fannie/Freddie?
2. Is it legal to have units being sold without approval? How about after the community is 100% occupied?
3. What if there is no approval even after a couple of years, and I want to sell? Will it work against me that the company has no approval?
4. Is it typical for lenders to be concerned about the approval? Should I give it up and look for some other project?

Thanks in advance!

 

[HomeGuru]

State: California

--

There is a condo conversion project and I am in the process of buying one unit there. Two lenders I talked to, are unwilling to underwrite the loan because the project is not approved by Fannie/Freddie yet.

The management company is saying that they will apply for approval after all units are occupied.

So I have a few questions:

1. How long does it take for approval from Fannie/Freddie?

**A: don't know but on projects that I have worked on it tool 6-12 months.
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2. Is it legal to have units being sold without approval?


**A: yes.
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How about after the community is 100% occupied?

**A: there is no law that requires a property to be FNMA/Freddie approved.
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3. What if there is no approval even after a couple of years, and I want to sell? Will it work against me that the company has no approval?


**A: possibly, but there are numerous other lenders.
*********
4. Is it typical for lenders to be concerned about the approval? Should I give it up and look for some other project?

**A: if you can get a 30 year fixed mortgage at similar or better rates then not to worry.
**********
Thanks in advance!

**A: ok, and talk to a mortgage broker.