Smart Families Trust Zeus™
Thinking of buying a condo or townhouse? Our team is here to help. We can show you how townhouse and condo loans differ from loans for single-family homes, explain what you need to qualify for a condo or townhouse loan, and give you pointers to keep in mind when you’re looking. Then, all you have to do is fill out our Super-Simple Application™ to get started!
How Does a Townhouse or Condo Loan Differ From a Home Loan?
Some people prefer to live in a townhouse or condo rather than a single-family home, as they typically require less property maintenance and are more affordable. However, the interest rates tend to be higher for condo and townhouse loans, and the loans usually require more underwriting, making them more difficult to qualify for.
Townhouse loans are typically the most similar to loans for single-family homes. This is because buying a townhouse also includes purchasing the land the townhouse sits on, which isn’t possible for a condo. As a result, lenders are very familiar with these purchases and can handle them similarly to a single-family home. At the same time, lending for a condo looks different because of factors like the homeowner’s association, the character of the development, and more.
That being said, financing a condo loan is not that different from financing a single-family home. FHA and VA condo loans are available just as they are for single-family homes. Your lender might want more documentation and information from you to ensure that your condo qualifies for the type of loan you’re seeking since some loans are only available for warrantable condos. But once all that is done, you’ll still be able to move into the space you picked out and make it your own.
Rest assured that whether you’re buying a condo or a townhouse, our Loan Specialists can help you navigate the process and explore all your options.
How to Secure a Townhouse or Condo Loan
What you’ll need to qualify for the condo or townhouse loan depends on where you’re lending from. To secure a conventional townhouse or condo loan, you will need a credit score of 620 or better and a minimum down payment of 3-5% of the total loan amount. Finally, your debt-to-income (DTI) ratio must be no higher than 36%, and the condo must be your primary residence.
For FHA condo loans, your credit score must be at least 580 and your DTI ratio no more than 50%. A 3.5% down payment is also required.
VA condo loans are a bit different. There is no minimum credit score or down payment needed. But obviously, you must either be an active member of the military, a veteran, or the surviving spouse of a military member or veteran to be eligible. And while there is no minimum DTI ratio requirement per se, if yours exceeds 41%, you will need “compensating factors” such as a higher credit score.
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Documents Needed For All Loans:
- A copy of your current Drivers License and Social Security Card
- Most recent 30 days worth of pay stubs
- Most recent 60 days worth of bank statements. (If using retirement funds, please provide terms and conditions of withdrawal)
- Most recent 2 years W-2’s (please provide signed and dated Year-To-Date Profit and Loss statements if self-employed)
- Most recent 2 years IRS tax returns (both personal and business, all pages, all schedules please)
Additional Documents if Purchasing a Home:
- Copy of the fully executed purchase contract (signed by all parties)
- A copy of the cleared earnest money check or money order
- Copy of your option money check
- Homeowner’s Insurance Company contact information
Things to Keep in Mind When Looking
First and foremost, make sure you search for reputable condos and/or townhouses mostly filled by owner-occupants. Make sure you look at all loan options available; you may end up with more than one loan offer to choose from. Finally, be prepared to pay more in closing costs and wait for a closing date longer than is typical. The additional underwriting and documentation condo and townhouse loans require are usually the borrower’s responsibility
Fill Out Our Super-Simple Application™ Today!
Zeus Lending makes it easy for interested parties in Texas to apply for townhouse and condo loans. Our Super-Simple Application™ takes no more than 3 minutes to complete. One of our Loan Specialists will then contact you on how to proceed. You are under no obligation whatsoever. If you do decide to move forward with us, our experienced and knowledgeable Loan Specialists will help you choose the best mortgage loan for your needs. We aim for 100% customer satisfaction, no matter what you’re looking for.
Fill out the application today and get started on the path toward purchasing the townhouse or condo of your dreams!
Ask away. We love questions!
Frequently Asked Questions
A Loan Specialist is here to help:
- 713-ASK-ZEUS answers@zeuslending.com
- We’re available Mon-Fri 8 a.m.–7 p.m.
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If you’re in the neighborhood,
drop by our World Headquarters: 3104 Edloe Street, Suite 210
Houston, TX 77027