In some urban markets a multifamily home is converted to condominiums. For example, a duplex is turned into two condominium units. Or a triplex is turned into three condominium units. Or a fourplex is turned into four condominium units.
The required condominium project review that needs to be done on most condominiums is waived on condos that don’t consist of more than four units.
A condominium project review that is required on condominiums that are five units or more will analyze the condominiums budget, reserve accounts, insurance policy, and numerous other things to make sure it meets all required mortgage guidelines.
Buying a condominium is different than buying a single-family home, because a single-family home does not have bylaws and declarations, operating accounts, and various expenses that a condominium has that a single-family home does not. So, a condominium project review is normally done to make sure that the condominium project is being run satisfactorily.
The fact that no condominium project review is required on condominium projects which have four units or less is quite generous.
Mortgage guidelines have the ability to change at any time, so always talk to a well-reviewed mortgage loan officer to make sure you understand the current guidelines and how they might apply to you.