News > What are Financing Options for Phoenix Condos?

2025-07-14

Do you need a mortgage to buy a Phoenix condo? In most cases, condos can use conventional financing like you would get for any single family home. However, because when you buy a condo, you are also purchasing an interest in the common elements of a condo (pool, clubhouse, parking and many times the full building's exterior), sometimes mortgage companies will have some extra requirements that must be met.

What Lenders Examine For Financing Condos

When a lender determines whether a condo can be financed with a convention mortgage, they will review the following information which they will obtain from the Homeowners Association for the condo community. This information is provided in the form of a condo "questionaire" during the escrow period.

• The master insurance policy - the entire grounds as well as the exterior of the condos must be insured adequately.
• Reserve levels - most condo homeowner's associations have a "reserve account," which is set aside for maintenance of the common elements. Conventional lenders usually require an amount equal to 10% of your annual operating budget be set aside in your condo reserve fund.
• Renters vs. owners - if the renter/owner ratio is over 50%, conventional financing may not be available.

• HOA dues deadbeats - if over 15% of homeowners are at least 60 days behind on their dues payments, conventional financing may not be available..
• Current lawsuits - if the HOA is named in a current lawsuit, this may require special review by the lender.

If the condo community doesn't pass these requirements, they are considered "unwarrantable," which means a buyer cannot get conventional financing for a property. Though possible, nonconventional financing will be more difficult and probably more expensive.

FHA Financing

FHA insured financing is sometimes preferred by first time home buyers because the down payment requirements are less. For condos, the easiest way to get FHA financing for a condos is to choose a condo that has been pre-approved for FHA financing. This list, however, is fairly short in the Phoenix area. Instead, you'll need to use a mortgage broker that will do the work to get a special approval for FHA financing for just the condo you are buying. In most cases, if the condo community is warrantable for conventional financing, then it should be approved for FHA financing.

VA Financing

Similar to FHA insured financing, VA financing (for veterans) is easiest when the condo or townhome development is on the VA approved list. The good news is that over 350 condo communities are on that list for Phoenix. VA financing is preferred by veterans interested in getting a loan with no downpayment.

We help our clients navigate the slightly more complex process of buying and financing a condo in Phoenix. Looking to buy in the Phoenix area? We are condo experts and would love to help. Contact us for next steps.

 

Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.

Related Links

• Phoenix Condo Buyer information