Less than 20% down

Condos may allow 90 percent financing but banks very likely will not. So if you want to put less than 20 percent down, please submit a bank pre-approval letter which includes a statement that they will finance say 85 or 90 percent of purchase price for you.

90% in a condo is definitely doable, we've done half a dozen deals where the buyer financed 90%. listing agents on the other hand won't always be so receptive to this idea especially if your contingent on financing.

Call the various Banks and check in with a qualified mortgage broker well. If you email me directly I will send you an our banker referral list.

Keith
TBG

It's less an issue of what the buildings will allow and more what kind of contingency sellers are willing to risk. Remember if you have a financing contingency it raises the risk for the seller that their property will be off the market for months and still not close. If through no fault of the seller you can't get financing, they lose their deal. The higher percentage the buyer is financing, the higher the risk. There is also more pressure re: the appraisal because there is zero margin for error.
If you aren't asking for a contingency you will probably find much less resistance to such deals but I have heard that there are some condos which while they have absolutely no right to reject deals with 90% are simply not processing the right of first refusal waiver.

Interesting to note, it's only in New York City that people tend to lose their minds when you say you want to finance a condo with 90%. Practically everywhere else people are using 90 95% financing.

Personally I like to have as little mortgage as possible, that's more of an emotional decision than a financial one.

Keith, Are they paying for PMI with 90-95 percent financing?

Remember that while in a Coop maintenance is in first position under the lien law, in condos common charges are in second position. So in foreclosures, common charges arrears get wiped out. Since foreclosure proceedings can take a long time, these can add up. We bought a unit at 300 East 93rd St where something like $175,000 in arrears got wiped out. So if you have a building with a substantial amount of units which are highly leveraged and there is a market turn down, you can end up with an extreme financial pressure on the remaining units to make up the shortfall.

300 - I received pre-approval letters from banks (Citi, Chase, Wells) for up to 90% financing via "Non-Agency (Jumbo)" loans where no PMI applied so long as the purchase was for primary residence. If the loan amount fell below $726,526 then it would fall into a "High Balance" loan which is subject to PMI.

My experience with listing agents when presenting 90-95% financing offers were 1) them telling me to drop the financing contingency or 2) being told to go fly a kite. Thought by law listing agents had to present all offers to sellers.

I have a few jumbo programs with 90-95% financing and no PMI, 680 fico score. This is for max loan amount of $1.5M. I can do a jumbo coop loan with a 660 fico score up to 3M.

One of my best programs for a loan amount of about $1.25M combines a Fannie Mae 1st mortgage with a Heloc second which closes simultaneously. Instead of one jumbo loan which requires reserves, this product doesn't. It is for condos only, land lease okay with approval.
Another product I have does not require a condo questionnaire. Therefore it is immaterial if there are more than 50% investor units. This is for loan amounts up to $726,500, 90% financing. This is for primary or second homes. Loan can close in less than a month.

I have a link where a borrower can apply for a loan on a mobile device at his convenience. There is no charge, it takes less than 10 minutes.
In a soft market a seller is more agreeable to this kind of financing.

30yrs hit the nail on the head. I am President of my Condo Association. We are foreclosing on an apartment for common charges default- and while we are hopefully at the end stages, it's been in the courts for just shy of 5 years. The owner put 10% down, and we hope to get at least the bulk of our money back on the simple basis that the apartment has appreciated so much (gentrifying neighborhood). There may be some equity remaining even after paying the bank and us, but considering the recent downturn- it wouldn't be much. 10% down payment for borrowers that are stretching their financials- it's a risk for the seller's, as well as the building as a whole.
Yeah- 90-95% financing is common in much of the country...but the stakes and challenges aren't as high in many cases.

Regardless, it's available. If you don't want to expose yourself to that risk, buy a co-op.

I wonder what it take for condos to change their bylaws or other governing laws to 15-20 percent down?

Keith, If non-payment of condo dues and related forecloses outside of NYC is common occurance - as in most building have a few percent of units which are in this situation? In prime NYC, non-payment of dues and foreclosures are still rare.

How would you word it? Would you bar people from doing cash-out refis period?

The same 15-20% limit as down-payment on cash out refi. However, once you own the condo, there is no way for the board to enforce it.

Hmm... As part of regular bank loan docs, the borrower signs a piece of paper stating that all other loans using the property as collateral are subordinate to the bank's loan - isn't that the only thing that puts them first in line (and all other lenders know of the first loan and agree to a subordinate position)? So, could a condo structure their common charges agreement as a loan (like a revolving line of credit to the owner, and the condo has paid the services 'in advance' and is perpetually owed the fee), also using the property as collateral, and giving them first lien? Banks will be unhappy, but they already loan on co-ops where they are subordinate lenders (and charge for the position). I think it would be wildly unpopular,

"isn't that the only thing that puts them first in line*
No, it's the Lien Law.