No, there is no such thing as a "no questions asked" loan. But, believe it or not, there is something called "Limited Review" for Conforming (loans at $417,000 or less) condo loans, and it makes getting a condo loan "much" easier.
When a lender inputs a Conforming condo loan application and credit score into an automated underwriting system, if the resulting loan approval yields a "Limited Review" as part of the approval, that means some questions related to the condo will not be asked during underwriting.
What a Limited Review specifically means is that a lender will not require much of the documentation that would normally be required when underwriting a condo loan. For example, a "condo questionnaire" would not be required. This is the biggest advantage of a Limited Review. If you are buying a condo that has what a lender sees as an issue, like a high investor level such as 50% or more (investor level is how many units in the building are owned by investors versus owner occupants), then not having to get the condo questionnaire that would alert the lender to that high investor level means you will get a loan approval where you normally may not (lenders have a problem with condos that have a high investor level).
Avoiding the condo questionnaire also saves the money that a property manager would charge for that form, which is typically $50-$150.
You will not get a Limited Review authorization on a condo loan on a 5% or 10% down loan, or with a 680 or 700 credit score. To get a Limited Review you typically need a larger down payment such as 20% down, a higher credit score such as 740 or higher, and you need to be an all around strong loan candidate.
Tags: condo, condo financing, condo loan, Limited Review
Does the Limited Review also apply to refinances? Is there a big bump in the rate for Limited Review – there shouldn't be for 20% down and 740 people! How long have Limited Review loans been around and will they stay around? This could save the condo market, although buyers may want to think twice about a condo that is ashamed of its condo questionnaire.
Hello Jeff. The Limited Review does apply to refinances. There is no increase in the interest rate for this. Limited review for condo loans has been around for quite a long time, many years. However, I should make it clear, this is not an actual "loan program", it is simply an underwriting "allowance". I do think it is a huge benefit for borrowers and lenders that know how to use it, but I do not know that it will save the condo market. After all it is not every borrower who has a lot of equity and a high credit score. Check in with any other questions.