Condos and townhomes can be lower-cost flips with a deep buyer pool. The catch is that an HOA sits between you, your contractor and your eventual buyer.
In short: Yes, LendingStreet finances condo and townhome flips, with up to 90% of the purchase price and up to 100% of the rehab, subject to program limits and the after-repair value. Beyond the usual flip review, the association decides a lot: how the project is set up, its finances, any special assessments and what work you are allowed to do. Check whether your future buyer can get financing in that project before you buy, because that decides how fast you can sell.
A townhome is a building style, not an ownership type. Some townhomes are fee simple lots in a planned unit development (PUD), where you own the land and the structure. Others are legally condos, where you own the interior and share the walls, roof and land.
Your title report and the recorded HOA documents tell you which one you have. A fee simple townhome usually gets a lighter project review. A condo, whatever it looks like from the street, gets a condo review.
For condos, lenders often ask the association to complete a questionnaire about the project. The same form matters when we refinance a condo into a rental loan; our condo questionnaire page explains it in more detail.
Flip programs can be more flexible than long-term programs, but some projects are harder to finance on any program. Those are often called non-warrantable condos. The items below are what usually come up.
A special assessment is a charge on top of regular dues to pay for a big repair, such as a roof, balconies or structural work. Some are paid as a lump sum and some run for years.
Ask for the association's resale or estoppel certificate, recent board minutes and the budget early in your due diligence. Minutes often show an assessment being discussed months before it is voted on. A large or open-ended assessment can eat your margin and can also make it harder for your buyer to get financing.
In a condo, walls, plumbing stacks, windows and the exterior are often common elements. You may need board approval before you touch them, and some changes are not allowed at all.
Build these approvals into your timeline. Draws are paid after work is completed and inspected, so a two-week wait for board sign-off is a two-week delay on your money.
This example is illustrative and not a quote. An investor buys a two-bedroom condo for $240,000 with a $35,000 rehab budget. Similar renovated units support an after-repair value of $370,000. Dues are $450 a month and the plan is a five-month hold.
The loan is 90% of the purchase ($216,000) plus 100% of the rehab ($35,000), or $251,000, about 68% of ARV. The investor brings $24,000 toward the purchase plus sample closing costs. At a sample rate of 10.99% on the full balance, interest is about $2,299 a month, or about $11,494 over five months. Dues add $2,250.
Total cost is $275,000 against a $370,000 value, a $95,000 spread. After interest and dues, about $81,256 remains before closing and selling costs. If the board votes a $7,500 assessment during the hold, that drops to about $73,756.
Many condo buyers use conventional or FHA financing, and both have project rules. If your project does not meet them, your buyer pool may shrink to cash buyers and investors, which can mean a lower price or a longer listing.
Ask a local agent how recent sales in the building were financed. If buyers have been closing with standard mortgages, that is a good sign. If every recent sale was cash, price your exit accordingly.
Send the purchase contract, the HOA name and contact details, the most recent budget and dues amount, any known assessments, your scope of work with notes on what needs board approval and comps from the same or similar buildings. Include your flip history and entity documents.
Our financing team will review the property and the project together and come back with 2–3 options. Loans start at $150K, so lower-priced units may need to be bundled or bought with cash.
Yes, on many projects. The lender reviews the unit and the association, including its finances, litigation and ownership mix. Some projects are harder to finance and may have fewer options.
It depends on the legal setup. A fee simple townhome in a PUD is usually reviewed like a house. A townhome set up as a condo gets a condo project review.
It depends on the contract and local practice. Some sellers pay assessments voted before closing, and some pass them to the buyer. Confirm it in your purchase contract and with your title company.
Usually yes for anything that touches common elements, structure, windows, plumbing stacks or flooring rules. Get written approval before starting so draws are not delayed.
It is a condo project that does not meet standard mortgage guidelines, often due to litigation, low reserves, concentrated ownership or commercial space. Your buyer may have a harder time getting a loan.
Possibly. A DSCR refinance after the rehab is a common path, but the project review for a long-term rental loan is often stricter, and HOA dues count in the ratio.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.