10% Down for Condos with
No or Low Reserves

What’s the big difference between buying a condominium and buying every other type of housing? The condominium approval process. Did you know that lenders need to answer as many as 50 questions for Fannie Mae and Freddie Mac before they know they can lend on a condo unit? The answers to just one of these questions can dictate the down-payment required on your new home. Here’s the question:

• Does the condominium budget provide for the funding of replacement reserves for capital expenditures and deferred maintenance at least 10% of the budget?

• If it doesn’t then the borrower must then put 25% down in order to avoid the reserve question.

• If you’re a borrower with limited cash or a seller who wants to expand their buyers’ market, this can kill your sale.

BUT There’s still hope! FNMA allows you to do a first and second combination with 10% down from the buyer and 15% second from a second mortgage holder. This then qualifies as 25% down and the lenders don’t need to worry about the reserve requirement. FNMA sees this as 25% down, so the lender does not have to concern themselves with the reserve requirement. POOF you’re into your new condo with just 10% down payment.


"Kurt assisted my wife and I to get a mortgage when we first arrived in the USA and had no credit history. He explained the complexities, found the right product and made it happen swiftly.... Results! He's also a nice guy!"

Clive D, West Palm Beach, FL

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