Loan Programs
Condos Reward the Prepared Buyer in the Phoenix Metro
Condo financing depends on the project as much as the borrower, so before you write an offer on a Phoenix or Scottsdale condo, confirm the HOA's owner-occupancy ratio, delinquency rate, litigation status, reserves and insurance — those five items decide whether the loan is possible.
Key takeaways
- The lender underwrites the HOA and the building, not just you.
- High investor concentration, heavy dues delinquency, litigation or thin reserves can make a project unwarrantable.
- FHA condo approval is a separate list — a condo that works for conventional may not work for FHA.
- Non-warrantable financing exists but costs more and typically requires a larger down payment.
Two approvals, not one
Every condo loan has a borrower approval and a project approval. You can be flawless on paper and still lose the deal because the association has 22 percent of owners more than 60 days delinquent on dues. That is why condo shopping should start with the question nobody asks first: is this building financeable?
What the project review looks at
The HOA questionnaire, budget and master insurance policy answer these.
- Owner-occupancy versus investor ratio, which matters heavily in short-term-rental-heavy Old Town Scottsdale and downtown Phoenix buildings.
- Percentage of owners delinquent on HOA dues.
- Reserve funding, generally at least 10 percent of the annual budget allocated to reserves.
- Pending litigation, especially construction defect claims.
- Adequate master hazard, liability and, where applicable, fidelity coverage.
- Commercial space share and whether any single entity owns too many units.
When a project is not warrantable
It is not the end of the road. Portfolio and non-warrantable programs finance these buildings, typically with a higher rate and 10 to 25 percent down. That can still be the right answer for a specific unit in a specific location. What you cannot do is discover the issue two weeks before closing, which is exactly when the HOA questionnaire usually comes back.
How to check early in the Valley
Before you write, ask the listing agent for the HOA name, the questionnaire if one was completed recently, the current budget and the master insurance certificate. Ask directly whether the association is aware of any litigation. Have your lender pre-screen the project. In Old Town Scottsdale, downtown Tempe near ASU and the Camelback corridor, high rental concentration is the most frequent blocker; in older Sunnyvale-era complexes, reserves and roof age come up more often.
Frequently Asked Questions
- What makes a condo warrantable?
- A warrantable condo project meets agency standards for owner-occupancy, HOA dues delinquency, reserves, insurance, single-entity ownership and litigation. Meeting those makes conventional financing available at standard terms.
- Can I get an FHA loan on a Phoenix condo?
- Only if the project is on the FHA-approved condo list, or qualifies through single-unit approval. FHA approval is separate from conventional warrantability.
- How do HOA dues affect condo qualifying?
- Monthly HOA dues are added to your housing payment for debt-to-income purposes, so a 450 dollar dues figure reduces the loan amount you qualify for just like a higher property tax bill would.
The information on this website is provided for general education only and does not constitute financial, tax or legal advice. Loan programs, guidelines and availability are subject to change and to borrower and property qualification.