Question about non-conforming loan [co-op]

[vn25]

Hi,

we are looking at an apartment we really like, but because of the sponsor owning more than 47% of outstanding shares, which is the Fannie/Freddy guideline, we wouldn’t be able to get a conforming mortgage from a large bank. 

There red are a few local lenders that will lend to this building, but these, as I understand it, are non-conforming loans and cannot be sold to Fannie/Freddy. 

Cam someone speak about the advantages or disadvantages of pursuing one of these? It seems like the internet and closing costs are higher, but any other gotchas or dangers beyond that?

Thanks!

[kc0039]

---

@vn25 wrote:

Hi,

we are looking at an apartment we really like, but because of the sponsor owning more than 47% of outstanding shares, which is the Fannie/Freddy guideline, we wouldn’t be able to get a conforming mortgage from a large bank. 

There red are a few local lenders that will lend to this building, but these, as I understand it, are non-conforming loans and cannot be sold to Fannie/Freddy. 

Cam someone speak about the advantages or disadvantages of pursuing one of these? It seems like the internet and closing costs are higher, but any other gotchas or dangers beyond that?

Thanks!

---

Fixed rate or ARM? The only reason to do this is if you really want the home. Disadvantage - people who want to buy your home and who will only qualify with a secondary market loan (conforming as you call it), will not be able to buy this home which will disqualify a lot of people who will be interested in your home if you sell.