Thomas Martin – Mortgage Loan Originator– Phone: 954-667-9110 – Subject to change without notice – Rev 3-13-2025
Condos With Rec Leases Florida Mortgage Lenders
Rec Leases are usually Senior Condo Properties with Florida Condominium recreation leasess held in fee simple. They are usually Senior Communities with Florida Condominium recreation leasess like Country Manor, Century Village, Omega, Etc.
Primary Condos With Florida Condominium Recreation Leases
o Max LTVs for jumbos are as follows:
Maximum 80% LTV up to $1,000,000
Maximum 75% LTV for $1,000,000 – $2,000,000
Maximum 70% LTV for $2,000,000 +
Florida Condominium Recreation leases for condos
- A long-term lease between a homeowners association (HOA) and a third-party
- Gives access to Florida Condominium recreation facilities for a set period of time
Florida Condominium Recreation Leases
- Allows specific uses of the land for a set period
- Can include activities like hunting, fishing, camping, horseback riding, snowmobiling, and cross-country skiing
Tips for Florida Condominium Recreation Leases
- Have a written contract that clearly states the rights and duties of both parties
- Anticipate potential problems and describe how each would be resolved
- Set realistic expectations
- Understand what to expect before signing any contract
- Talk to leasing companies about average lease rates in your area
- Look for companies that prioritize landowners
Florida Condominium Recreation Lease Properties
Florida Condominium recreation leases properties will be reviewed on a case-by-case basis. Generally, the lease must be subordinate to the mortgage and the term must equal or exceed the term of the loan. Required documentation include a copy of the lease and confirmation how the lease payment is made (typically paid through HOA). Additional documentation may be required.
• This product guide describes guidelines and requirements for the following loan programs:
o Fully Amortizing 3/1, 5/1 and 10/1 Treasury ARMs
• All loans must be manually underwritten and fully documented.
• Loan is subject to a Pre-Close Eligibility review completed prior to final approval.
• All loans must close in the United States.
• Before the loan is registered, the customer must submit their scenario to their Account Executive (AE). The
AE will submit the information to the TPO scenario desk for review. The scenario documentation will be sent to
the investor for further review prior to loan registration to ensure the scenario is viable. Please allow 48 hours
for review. The scenario review requires the following documentation:
o Completed C.H.A.I.R form aka FBC Flex Loan summary cover letter
o 1008
o URLA (all assets must be listed on URLA)
o Credit Report
Loan Purpose
o The LTV will be based on the lower of the purchase price or appraised value.
• Rate-Term Refinance & Cash-Out Refinance
For non-seasoned Refinances there is no seasoning requirement. Refinance can occur upon the recording of ownership documentation. If the refinance occurs less than 12 months after purchase, the LTV will be based on the lower of the purchase price or appraised value. An exception to this would be if the owner made significant improvements to the property which can be documented.
Compliance Requirements
For all loans, including foreign national loans, made to borrowers under this program must demonstrate and document the ability and capacity to repay the debt, satisfying ATR requirements.
Qualified Mortgages (QM) and Non-Qualified (Non-QM) loans are available for qualified borrowers.
Maximum Debt to Income (DTI)
The maximum DTI is 45%.
The DTI will be held to a maximum of 40% if no primary housing debt is included in the DTI due to the mortgage and/or property owned by non-borrowing spouse. If the borrowing spouse is on title but not on the mortgage, include taxes,
Occupancy
Every effort must be made to ascertain whether the occupancy status of the property as represented by the borrower(s) is reasonable.
Eligible occupancy:
• Owner-Occupied
• Second Home
• Investment Property
Florida Lenders That Lend On Condominiums With Recreation Leases
Loans securing units in Florida condo projects with mandatory memberships that require the HOA members to pay dues to a third-party organization amenities such as a tennis court, golf course, pool, golf course or other Florida Condominium recreation lease facility not eligible for sale to Fannie Mae. The Florida Condominium Recreation leases condo project must be the sole owner of its amenities, though certain exceptions will be allowed when there is a shared amenities agreement between HOAs or Florida co-op projects.
Florida condo projects subject to Florida Condominium recreation leases leases are also not eligible for Fannie Mae conventional financing. A Florida Condominium recreation lease is a long-term lease between the HOA and a third party for access to certain Florida Condominium recreation lease facilities for a specified time and payment. In these scenarios, the owner of the facilities is often the project’s developer or has some financial relationship with the developer and the leases often provide ongoing profit to this party for the duration of the lease. The condo recreational lease may permit the owner of the facilities to lease the amenities to other parties in addition to the HOA or co-op. The HOA or co-op may have certain financial, insurance, and other legal obligations under the lease that may be burdensome over time. These leases may or may not provide the project long-term access to the amenities beyond the initial lease term.
When a Florida HOA is part of a master association, the lender is required to evaluate whether the subject property’s HOA members are required to participate in a mandatory membership that is managed through the master association. Additionally, the master association may not be subject to Florida Condominium recreation leases as described above.
Florida mortgage lenders are encouraged to review the project’s legal documents, sales contract, and budget to identify mandatory memberships and Florida Condominium recreation leases. Some red flags that a project may require a mandatory membership, or be a party to a Florida Condominium recreation lease, is that the amenities may have some of the following characteristics:
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the amenities have a different name from the residential project and may be recognized as a different legal entity from the HOA,
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owners are required to pay large up-front fees to become a member or have access to the amenities,
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owners are required to pay monthly or periodic dues to the entity that owns or operates the amenities (these dues may be paid directly to the owner or operator or they may be paid to the HOA and passed through to the owner or operator),
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the general public may be able to purchase memberships or access passes for the use of the amenities,
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the amenities can be leased or rented to the public for events not hosted by the HOA or its members, or
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HOA members may be subject to block-out dates or other use restrictions.
