Condo financing, without the maze.

A warrantable condo meets Fannie Mae and Freddie Mac guidelines for conventional financing. Requirements include at least 50% owner-occupancy, no single entity owning more than 20% of units, adequate HOA reserves (10%+ of budget), no pending litigation, and no more than 35% commercial space. Warrantable condos qualify for the widest range of loan options and best rates.

Yes, but the condo building must be on the FHA-approved list or qualify for single-unit approval. You can check approval status on HUD's condo lookup tool. If the building isn't approved, the HOA can apply for project approval, or your lender can pursue single-unit approval for buildings with 5 or more units.

HOA dues in DC typically range from $200 to $800 per month depending on the building's age, size, amenities, and location. High-rise buildings with concierge, pools, and fitness centers are at the higher end. Smaller converted buildings tend to be lower. HOA dues are included in your debt-to-income ratio by lenders, reducing your borrowing power.

Non-warrantable condos can still be financed through portfolio lenders who keep loans on their books rather than selling to Fannie Mae or Freddie Mac. Expect a higher interest rate (0.25-0.75% more), larger down payment (20-25% minimum), and stricter credit requirements (700+ score). Fewer lenders offer these programs, so shop around.

Closing costs for a DC condo are similar to a house — you'll pay the 1.1% recordation tax on the mortgage and negotiate the 1.1% transfer tax on the sale price. First-time DC homebuyers may qualify for reduced transfer tax rates. Total closing costs typically run $10,000 to $20,000 on a $400,000-$500,000 purchase.

Review the HOA's reserve fund balance (should be adequately funded per the reserve study), annual budget, special assessment history, and delinquency rate. Buildings with less than 10% of their budget going to reserves, frequent special assessments, or more than 15% of owners behind on dues are red flags.

Yes, but investment condo financing requires 15-25% down, a higher interest rate (0.5-0.75% more than primary residence), stronger credit (700+), and more reserves. You cannot use FHA or VA loans for investment properties. Also verify the building's rental cap — many DC buildings limit the percentage of units that can be rented.

In a condo, you own your individual unit and share ownership of common areas. In a co-op, you own shares in a corporation that owns the entire building, and you have a proprietary lease for your unit. Co-ops require specialized financing (co-op loans, not mortgages) with fewer lender options. DC has several co-op buildings, particularly in Dupont Circle and other historic neighborhoods.

DC's homestead deduction reduces your property's assessed value by $91,950 for property tax purposes if you live in the unit as your primary residence. On a condo assessed at $450,000, this saves roughly $780 per year in property taxes. You must apply for the deduction after purchasing — it's not automatic.

A special assessment is a one-time charge from the HOA for major expenses not covered by regular dues — such as roof replacement, elevator modernization, or facade repairs. Assessments can range from a few hundred to tens of thousands of dollars. Ask for the building's assessment history and upcoming capital needs before buying. A well-funded reserve reduces the likelihood of assessments.

District Mortgage is a licensed mortgage broker, not a bank or direct lender. We do not fund loans with our own money. We take your application and shop it across our wholesale lender network, so the lenders compete for your loan and you take the winning offer. NMLS #2819502 — verify us at nmlsconsumeraccess.org.

No. We are licensed in the District of Columbia only, so the property has to be in DC. We cannot accept an application or a pre-qualification request for a property in Maryland, Virginia, or any other state. If your property is elsewhere, nmlsconsumeraccess.org will show you licensed originators in that state.

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