There are many great loft deals on the market today. With the rise in distressed properties, in particular short sales and foreclosures, the ability to finance a property has become more important than ever. In the past getting pre-approved meant having a written letter stating that a credible lender has pulled your credit, verified assets, and likely checked your W-2′s to indeed make sure you are gainfully employed. Today there is an additional step required. If your buying a loft then 99% of the time you’re legally purchasing a condo. It’s critical to have the condo building be pre-approved as well. Any good real estate agent will instinctively know to do this in today’s market. However, if you’re going it alone with no agent or an agent that is not familiar with condos, then beware. There are some very important questions to ask. You could be weeks down the road, and have spent hundreds of dollars on appraisers and inspectors, only to find out the building is not finance-able.   This really needs to be done before even stepping foot in the home. A great way to start is by asking the listing agent if the building has had any issues getting financing recently. Most good listing agents will know. If that doesn’t work, try getting the management company’s contact information and asking them. To be certain financing is available you’ll eventually need your lender to send over what’s called a “condo questionnaire”. This is a list of questions that allow the lender establish if the building is finance-able or not.  Often though this can take some time and management companies don’t really want to go through the hassle without a contract in place. So here are 3 good starter questions that should be asked right up front… 1.) What is the percentage of owner occupied units? If the answer is over 50% then you’ve got a problem.  2.) What is the percentage of units late on their assessments? If the answer is over 15%, then you may need a written exception to secure the financing. and finally 3.) Is there any pending litigation in the building? This of itself is not necessarily a problem. However, if the litigation is such that the homeowners could be exposed to a large settlement (not in their favor) this could also be a problem as well. A great thing to look for is whether or not the building is FHA approved. If it is, then great! Not only does that mean that financing is available with as little as 3.5% down, but it also shows that the building has already gone though these tests and passed. Best of luck out there and as always, give us a call if you have any questions (312)867-2261.