I wanted to address the issue of Santa Clarita home investors looking to buy within a condo community, and the problem they face with respect to being able to get a loan. The lender will typically require a full condo review if providing a loan to the investor. There can be a number of issues they look at, not just the owner occupancy issue. However lately, I’ve been hearing from other agents how they’ve been running into the issue of owner occupancy, and it being a stumbling block to their buyer getting the loan they need to buy the Santa Clarita condo.

A typical owner occupancy issue would be where there is less than 50% owners in any given condo community, vs the amount of non-owner occupied units (renters).

The lender will often look for a ratio that reflects a majority of owners, of course, verify the specific guidelines for whichever lender you choose to utilize. Other issues that come up in a condo review include the amount of money an HOA puts toward reserves from their dues collected, and they also look at issues such as the current delinquency percentage of the HOA dues.

I received an email this morning from a local Santa Clarita home lender, and they outlined issues on this very subject as it pertains to both investors, and home buyers purchasing a condo for their primary residence. I’ll copy and paste a snippet from that email here:

If a buyer puts less than 10% down or is buying a property as an investment, then they will be subject to full condo reviews. For full condo reviews we must meet the following requirements:

• Project must have less than 15% delinquency on HOA fees

• Project must be putting at least 10% of their does towards reserves

• Project must be at least 50% Owner occupied for Investment buyers

• Project must be at least 30% Owner occupied for owner occupied buyers

• Litigation would be looked at on a case-by-case basis

• Project must have ample reserves

• No one entity can own more than 10% of the units in the complex

• Common Areas must be completed

I made an Ask Robert SCV TV episode regarding Santa Clarita home investors in condos running into this very issue of owner occupancy percentage not meeting their lender’s guidelines.

Are you looking to buy a Santa Clarita condo? Looking for an investment condo to produce rental income? Want that buy and hold strategy to work for you? ASK Robert! I can help you. Start by contacting me @ 661-373-2374.

VIDEO: Owner Occupancy Issue With Santa Clarita Investment Condo Purchase