The loan has to fit the borrower and the house. These are the property conditions that quietly kill financing in the Capital Region — and which ones have a workaround.
Before the mortgage side, I sold over 1,000 homes here in the Capital District. These answers come from someone who has sat in the agent’s chair at the closing table — not a banker reading you a policy manual.
Sometimes, because the building gets underwritten alongside you. Owner-occupancy ratios, reserve funding, pending litigation and a heavy short-term rental mix can all make a project non-warrantable for conventional financing. There are programs for non-warrantable condos, but it is much easier to check the project before you go under contract.
Full breakdown: Windham Hunter →
#Yes, routinely. It just has to be dry, safe, and structurally sound. An unfinished basement is not counted as living space, which affects value but not eligibility.
#For value, yes. Appraisers report below-grade finished space separately and it does not count as above-grade square footage, so a “4 bedroom” where two bedrooms are in the basement may not appraise like one.
#Yes, and the key question is whether they are owned or leased. Owned panels usually add value. A lease or power purchase agreement means the payment counts in your debt-to-income and the filing against the property has to be reviewed — get the agreement early.
#Generally yes. Age, condition and insurability are what matter, and insurance carriers can be pickier about tanks than lenders are.
#Usually yes, with a properly permitted and inspected installation. The obstacle is more often the insurance carrier than the loan, so get the quote during your inspection period.
#Absolutely, and most of the rural Capital Region is on septic. Government loans require a satisfactory septic evaluation; conventional generally defers to local requirements and your own inspection.
#That mismatch matters. Appraisers and some underwriters look at the permitted bedroom count, and a four-bedroom marketing claim on a two-bedroom septic can affect both value and eligibility. Worth checking with the county before the offer.
#Yes. FHA, VA and USDA require potability testing and adequate flow, and conventional often follows local rules. Test early — a failed water test on a deadline is a needless emergency.
#Typically the violations have to be resolved before closing, because they affect marketability and sometimes insurability. Sellers often do not know they exist — a municipal search catches them early enough to negotiate.
#Conventional, usually yes. On FHA and VA, a home built before 1978 with defective paint surfaces generally requires repair and clearance before closing. It is a cheap fix that becomes expensive when it shows up in week four.
#Yes. What underwriting and your insurance carrier care about is remaining life and whether it is leaking. A flat roof near the end of its life becomes a repair condition or a renovation-loan item.
#Financeable in most cases, insurable in fewer. Carriers are the constraint here, and some will require an update before they write a policy. Ask your insurance agent before your inspection period expires.
#There is no hard acreage cap, but the value has to be primarily in the house rather than the land, and the appraiser needs comparable sales with similar acreage. Where the land is the real asset, a land or lot loan may fit better.
#Yes. Outbuildings may contribute little or nothing to appraised value, which matters if you are counting on that barn to support the price.
#Yes, conventional financing allows it on a warrantable project for an eligible buyer. The project review, not the down payment, is what usually decides a condo deal.
#For FHA financing, the project needs to be on the approved list, or the unit needs a single-unit approval. Conventional runs its own project review instead, which is why a building that fails FHA can still close conventional.
#A special assessment is a one-time charge to owners for a capital project the reserves cannot cover. A completed or funded assessment is usually workable; a large pending one with no plan is what stops project approval.
#They count as a monthly obligation in your debt-to-income, dollar for dollar. High dues can cut your buying power as much as a car payment, which is why we price the unit and the dues together.
#It can. Pending litigation involving the structure, safety, or the association’s finances often makes a project unwarrantable. Minor slip-and-fall claims covered by insurance usually do not.
#Sometimes. High investor concentration is one of the classic reasons a project fails conventional review, especially for a non-owner-occupant buyer. Portfolio programs exist for exactly this situation.
#Often yes, though a recently converted project gets a closer look at reserves, the developer’s remaining ownership, and how complete the conversion is. Older conversions with a long operating history are easier.
#Co-ops and condos are where mortgages go to die, and almost always because of the building rather than the buyer. Knowing which situations don't work saves you an appraisal fee and a month.
You want an FHA or VA loan in a non-approved project. FHA and VA lend only on approved projects. If the building isn’t on the list — and most Capital Region buildings aren’t — those programs are unavailable regardless of your file. Conventional loans →Portfolio programs →
The project has active litigation. Structural or safety litigation stops agency lending cold. Minor slip-and-fall suits are sometimes tolerated; construction-defect claims almost never are. Portfolio programs →
Owner-occupancy in the building is too low. Fannie and Freddie want a majority of units owner-occupied, especially for an investment purchase. A building that has turned into mostly rentals fails the review. DSCR loans →
Reserves or the budget don’t meet requirements. Conventional requires at least 10% of the HOA budget going to reserves. A building running lean — or one with a special assessment underway — won’t pass. Portfolio programs →
You need a co-op loan and your lender doesn’t do them. A co-op isn’t real estate — you’re buying shares in a corporation. Many lenders simply don’t offer co-op financing at all in upstate New York, which is why buyers get stonewalled. Talk to Brian →
The commercial space is too large a share of the project. Mixed-use buildings with substantial retail or office square footage exceed agency limits. Great building, wrong loan program. Portfolio programs →
Full breakdown: Co-op & condo financing →
#Your income is documented normally here — the extra scrutiny lands on the building. The one income wrinkle worth knowing is how the HOA or maintenance charge hits your ratios.
Counts toward qualifying: W-2 wages, self-employment, bonus and commission — All documented under standard program rules. Rental income from the unit — On an investment purchase, a signed lease or an appraiser’s rent schedule — subject to the building allowing rentals at all. Retirement, pension, Social Security — Documented and continuing, grossed up when non-taxable. Asset depletion — A common and effective tool on co-op purchases by retirees, where taxable income is low but assets are substantial. Co-op tax deduction pass-through — Not income, but the portion of your maintenance attributable to the building’s mortgage interest and taxes may be deductible — worth a conversation with your accountant.
Doesn't count (or counts against you): Income that ignores the HOA or maintenance charge — The full monthly charge counts against your DTI, and on a co-op it includes the building’s underlying mortgage and taxes. It is often larger than buyers expect. Rent in a building that bans rentals — Many co-ops prohibit subletting entirely. Projected rental income in that building is fiction. Assessment relief you’re hoping for — A pending special assessment counts. A hoped-for reduction doesn’t. Board approval you don’t have — On a co-op, financial qualification for the lender and approval by the board are two separate hurdles. The board can say no for its own reasons.
On co-ops the board package is a second underwriting. I’ll tell you what boards in this market actually ask for — and it’s frequently more conservative than the lender.
Full breakdown: Co-op & condo financing →
#Nearly every one of these is a building problem discovered too late. Ordering the right documents in week one is the whole game.
The condo questionnaire comes back failing. Litigation, insufficient reserves, high investor concentration, or a special assessment. Every answer on that form is a potential decline, and it usually arrives in underwriting. What I do: I order the questionnaire and the budget the day you identify the unit, not at underwriting. If the project fails agency review, we pivot to a portfolio investor on the same timeline.
The project isn’t FHA or VA approved. The buyer is pre-approved for FHA, finds a condo, and discovers weeks later that the project was never approved or its approval lapsed. What I do: I check the HUD and VA approval lists before you write the offer. If it's not approved, I tell you which programs will work in that building instead.
Insufficient master insurance coverage. The HOA's policy lacks required walls-in coverage, has too high a deductible, or is missing fidelity coverage. Lender requirements on this have tightened significantly. What I do: I review the master policy early and tell the HOA exactly what the lender needs. Most of the time the association can get an endorsement — if we ask in week one instead of week five.
The co-op board declines the buyer. The file closes with the lender and the board says no. Boards can require reserves, debt ratios, or interview outcomes far beyond lender standards. What I do: I prep the board package alongside the loan file and tell you honestly what that specific building's board tends to require, so you're not surprised by an interview or a reserve expectation.
Appraisal or share-value problems. Few comparable sales in the building, or on a co-op, a share valuation the lender questions. Small buildings with little turnover are especially hard. What I do: I get comps and building data to the appraiser with the order, and on co-ops I work with lenders who actually understand share loans rather than one learning on your file.
Recertification and deferred maintenance. Post-Surfside scrutiny means structural inspection reports and deferred-maintenance findings can stop a loan in a building that has financed fine for years. What I do: I ask for the reserve study and any inspection reports up front. If there's a structural finding, we know which investors will still lend and on what terms.
Full breakdown: Co-op & condo financing →
#Fifteen minutes, no credit pull, no application, no pitch. Worst case you learn something and I don’t get your business.
Brian Marchand · Sr. Loan Consultant, New American Funding · NMLS #481563
Works on properties that complicate financing for buyers and homeowners in Albany, NY and the Capital Region. Licensed in New York State. New American Funding, NMLS #6606 · 18 Computer Dr E, Suite 103, Albany, NY 12205.