The short answer: When you buy a condo in Franklin, TN, your lender approves two things: you and the building. FHA and VA loans only work in condo projects that meet their approval rules, and a conventional lender reviews the association's budget, reserves, insurance and legal issues too. Check the building's approval status and read the HOA documents before you write an offer, not after.
Here's the call nobody wants in the middle of a condo purchase. Your credit's fine. Your income's fine. The appraisal came in. And the lender says the loan can't go forward because of the building.
Most people don't see that coming. With a house, the bank looks at you and the property. With a condo, it also looks at the whole project: the association's money, its insurance, its lawsuits, and the repairs nobody's paid for yet. If you're shopping Franklin TN condos for sale, here's your checklist.
Why is buying a condo different from buying a house?
Because the building gets underwritten, not just you.
Fannie Mae's Selling Guide requires a lender to confirm that the project meets Fannie Mae's eligibility requirements before it delivers a loan on a condo unit. That project review comes on top of reviewing you, the deal terms and the appraisal.
A condominium is a form of ownership, not a building style. Tennessee law defines it as the ownership of single units in a multiple-unit structure with common elements. You own your unit and share the common elements with the other owners. The association runs those, collects the dues, keeps (or doesn't keep) reserves, and carries the master insurance policy. Every one of those can help or hurt your loan.
How do I check if a Franklin condo is FHA or VA approved?
Look it up before you fall for the unit. Both lists are public.
FHA. HUD keeps a searchable list of FHA-approved condominium projects you can filter by location, name or status. To be approved, HUD says a project has to be complete, comply with state law, and meet its standards on insurance, financial condition, title, pending legal action and physical condition.
Not on the list? It isn't automatically dead. HUD's Single-Unit Approval can cover one unit in a project that isn't FHA-approved, if the project is complete and ready for occupancy, has at least five dwelling units, and isn't a manufactured home. Your lender requests it and will confirm whether the building qualifies.
VA. VA keeps its own list, and its lender guide says a condominium has to be approved by VA to be eligible for the VA loan guaranty. Search it on VA's condo report page: choose approved condos, pick Tennessee, and narrow it by city or by the Nashville regional office. An FHA approval doesn't answer the VA question. I'm a Coast Guard veteran myself, and here's more on how I work with veterans buying with a VA loan.
FHA approvals come up for recertification, so your lender confirms current status when it orders your loan.
What's the difference between a warrantable and a non-warrantable condo?
Warrantable is lender shorthand for a condo in a project that meets Fannie Mae or Freddie Mac standards, so the loan can be sold to one of them. Non-warrantable means the project misses those standards somewhere.
Fannie Mae's list of ineligible project characteristics shows where projects trip up. The big ones for a buyer:
- Hotel-style operation, including mandatory rental pooling.
- Pending litigation naming the association, or naming the developer over the project's safety, structural soundness, habitability or functional use.
- Commercial space above 35% of the project or the building it sits in.
- One owner holding too many units.
- Critical repairs, meaning material deficiencies or significant deferred maintenance.
Non-warrantable doesn't always mean no loan. It means your lender can't sell the loan to Fannie Mae, so your options narrow. Ask your lender what's available and how the terms compare.
Now the good news. Fannie Mae waives most of the project review for detached condo units and for smaller condo projects, though some basic requirements still apply.
Which HOA documents should I read before buying a condo in Tennessee?
Tennessee gives you a way to get the real answers.
Under Tennessee Code § 66-27-502, the association has to provide a disclosure packet within ten business days when a unit owner, a purchaser, or either one's lender asks for it. It can charge a reasonable fee. That part of the Tennessee Condominium Act covers units restricted to residential use unless the declaration says otherwise, and your attorney or title company can confirm how it applies to an older building.
Tennessee Code § 66-27-503 lists what goes in the packet. Here's what I read first.
Budget and reserves. Reserves are money set aside for big repairs and replacements. The budget has to state the reserve amount, or say there isn't one, and whether anyone has studied if it's enough. In a Fannie Mae full review, the lender checks that the budget puts at least 10% toward replacement reserves, or it relies on a qualifying reserve study, which is an independent analysis of what the building will need.
Special assessments and minutes. A special assessment is a one-time charge on top of your dues, usually for something the reserves can't cover. The packet shows any on your unit. It also includes twenty-four months of meeting minutes, and that's where the board talks through what's coming.
Delinquencies. The packet shows the total owed by owners who are more than 60 days behind. Unpaid dues leave a hole that everyone else fills. In a Fannie Mae full review, no more than 15% of the units can be 60 or more days past due.
Litigation. Pending suits against the association, and suits it has filed other than dues collections, have to be listed. Some litigation makes a project ineligible for Fannie Mae financing.
Rules. The declaration, bylaws and rules tell you what you can do with the unit: renting it out, pets, parking, exterior changes. If you might rent it someday, check now.
Developer control. In a newer building, the packet says whether the developer, called the declarant, still controls the board and when that ends.
Does the HOA insurance cover my condo, or do I need my own policy?
Usually you need both.
Fannie Mae requires a master policy on a condo project covering the common elements and residential structures, unless the project's documents require each owner to insure their own unit. Your own policy is typically an HO-6, which the National Association of Insurance Commissioners describes as covering the real property interest and personal property of a condominium unit owner.
Under Fannie Mae's rules, you need your own unit policy when any part of the interior or your improvements isn't covered by the master policy, or when the master policy carries a per-unit deductible. In that case, your policy has to cover that deductible. The Tennessee packet includes the association's coverage types, limits and deductibles, so hand it to your insurance agent and have them quote your HO-6 against it.
How do HOA fees change what I can afford?
Fannie Mae counts association dues in your monthly housing expense, along with principal, interest, taxes and insurance. Lenders call it PITIA, and the "A" is the HOA. That full number goes into your debt-to-income ratio, so higher dues shrink the loan you qualify for, the same way a higher tax bill would.
Two condos at the same price can carry very different monthly costs. Compare the total: mortgage, taxes, your HO-6 premium and the dues. Then check what the dues actually pay for.
Is a townhome the same as a condo?
Not necessarily. "Townhome" describes the building: attached homes with shared walls. "Condo" describes the ownership.
In a condo, you own your unit plus a shared interest in the common elements. Fannie Mae treats a development as a condo whenever it's declared or filed as a horizontal property regime under state law, which is why some detached homes are legally condos. In a planned unit development (PUD), you own the lot and the structure on it, and the HOA owns the common areas.
A townhome can be set up either way, which changes the loan review, the insurance and what you're on the hook to fix. The recorded documents tell you which, and I check before we tour.
How do I find Franklin TN condos for sale that fit my loan?
Loan first, building second, unit third. Get preapproved and tell your lender it's a condo and which loan you're using. Run each building through the lookups above, or ask your lender what review it needs. Then tour.
You can browse listings anytime on my VIP home search, but a listing isn't where you confirm that a building works for your loan. If you're still getting a feel for the town, my Franklin area guide is a good place to start.
The easier way: DM me, text me, or call me at 615-392-1186 with your price range, loan type and where in Franklin you're looking, and I'll set up your condo search.
Why work with me on a Franklin condo?
A condo is really two purchases: the unit, and a share of the association. Most of the risk hides in the second one.
I've been a Realtor since 2013 and a real estate investor for more than 20 years, so I read an HOA budget the way I'd read one for my own portfolio. I'm a US Coast Guard veteran, I wrote the Amazon bestseller SOLD, I've been on HGTV's House Hunters four times, and Real Trends has named me one of America's Best. You can read more about me and how I work.
On your purchase, I check the building's FHA or VA status before we tour, get the association's packet requested early, walk you through it, and write the offer so you've got time to review the documents.
The bottom line
The unit is half of what you're buying. The other half is the association: its money, its insurance, its rules and its legal record. Check the building first, read the documents second, and fall for the unit third.
I'm Kimo Quance with eXp Realty. If you're thinking about buying a condo in Franklin, DM me, text me, or call me at 615-392-1186. Tell me your price range and loan type, and I'll set up your condo search and check every building's approval status before you tour.
Frequently Asked Questions
Is it harder to get a loan on a condo than on a house in Franklin, TN?
It can be, because the lender reviews the condo project as well as you. FHA and VA require project approval, and a conventional lender checks the association's budget, reserves, insurance, litigation and repair needs against Fannie Mae or Freddie Mac standards.
How do I find out if a condo is FHA approved?
Search HUD's list of FHA-approved condominium projects at entp.hud.gov by location, name or status. If the building isn't approved, a lender may be able to request FHA Single-Unit Approval for a unit in a complete project with at least five dwelling units that isn't a manufactured home.
Can I use a VA loan to buy a condo in Franklin, TN?
Yes, if VA has approved the condo project, which is required for the VA loan guaranty. You can check VA's public condo report at lgy.va.gov by selecting approved condos and Tennessee, and your lender will confirm the current status.
What's the difference between a warrantable and a non-warrantable condo?
A warrantable condo is in a project that meets Fannie Mae or Freddie Mac standards, so the loan can be sold to one of them. A non-warrantable condo misses those standards, for example because of pending litigation, hotel-style operation or critical repairs, and that narrows your financing options.
What HOA documents does a Tennessee condo association have to give a buyer?
Under Tennessee Code § 66-27-502 and § 66-27-503, the association has to provide a disclosure packet within ten business days of a request from an owner, a purchaser or a lender. It includes the declaration, bylaws, rules, financial statements, budget and reserves, twenty-four months of minutes, insurance coverage, delinquencies and pending suits.
Does the condo association's master policy cover the inside of my unit?
It depends on the master policy. You'll need your own unit owner's policy, usually an HO-6, when any part of the interior or your improvements isn't covered by the master policy or when the master policy has a per-unit deductible.
Is a townhome the same as a condo in Tennessee?
Not necessarily. Townhome describes an attached building style, while condo describes a form of ownership where you own your unit plus a shared interest in the common elements, and the recorded documents tell you which one a given townhome is.
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