Current loan programs available for secondary residence condominiums differ from similar loans offered preceding the 2008 mortgage crisis. Prior to the year 2008, the majority of lenders sold condo loans to financial banking institutions operating on the secondary market, such as Freddie Mac and Fannie Mae.
What is the Secondary Market?
Once a mortgage loan has been processed and granted the bank generally does not keep the loan. Processed loans are typically sold to large banking institutions and REITs, real estate investment trusts. The mortgage originators, aggregators and investors that purchase loans in this manner are known as the secondary market. Explained clearly, mortgage lenders grant loans to applicants and then banking institutions and real estate investment trusts buy the aforementioned loans on the secondary market.
Loans After the Mortgage Crisis
Following the mortgage crisis, large banking institutions discontinued the majority of condominium loan purchases for secondary mortgages, the exception being those properties that qualified under very strict guidelines. Most of the properties in Santa Rosa Beach and Walton County along Hwy 30A are secondary residences that owners operate as rentals and therefore, do not meet institutional guidelines.?
Subsequent to 2008, a handful of lenders granted loans again due to a marginal number of banking institutions creating loan programs to keep these loans on their balance sheet, thus creating the secondary market for these types of loans. Over time there have frequently been three and five-year ARMs requiring 20-50 percent down. Interest rates for these loans have been around 4.25 percent or lower for several years now.
Loans Currently Available
Loan programs are currently accessible with as little as 20 percent down. Financing is provided through In-House or Portfolio Loans and they are typically amortized for 30 years. Here are the types of mortgages currently offered on Condos in Santa Rosa Beach:
10 year fixed rate mortgage
15 year fixed rate mortgage
3 year arm
5 year arm
While the majority of banks are unable to finance condominiums in Santa Rosa Beach, occasionally Lenders will approve an applicant and subsequently default on the loan shortly before closing on the condominium. This typically occurs when non-local lenders are utilized. These lenders tend to be unfamiliar with the area and its unique real estate market. Even so, recently there have been a few local banks that are willing to grant loans for condos. These are trusted Lenders with seasoned experience and knowledge who consistently rank within in the top financial loan lenders of the Walton County area. Each bank has it's own advantages depending on the condominium you want to finance and your individual situation.
My first choice
BancorpSouth - Linnette Kellar
BancorpSouth is my chosen recommended lender as their interest rates tend to be approximately a quarter point lower than other lenders and referred customers tend to have a hassle free experience with Linnette Kellar. This is the exception and not the rule in secondary residence lending.
Other lending options
FBT Mortgage - Kristen Blossman
Kristen Blossman of FBT Morgage is an expert in condominium properties on the gulf coast with some of the best condominium loan programs offered for well over a decade. For applicants with excellent credit and a good debt-to-income ratio, FBT Mortgage currently offers a three-year, five-year or a ten-year ARM with a 20 percent down payment. In recent years we have seen programs with down payments as low as 11 percent.
Regions Bank also offers loans for Santa Rosa Beach condominiums. Loan programs are available with 20 percent of the purchase price down.
Prime Lending - Brian Robinson
Prime Lending offers three, five, and ten-year ARMs with 20 percent down for secondary residences and 25 percent down for investors on many of the condominiums in Santa Rosa Beach. On occasion 30 year fixed rates can be obtained on certain buildings used as primary residences.