Where I lend around Commerce Township
Condo, site condo, or PUD — the paperwork decides, not the look
Commerce is a mix. Single-family subdivisions, lake homes, and a large amount of attached and condo-platted housing. Buyers sort those by appearance. Underwriting sorts them by legal structure, and the two don't always agree.
A true condominium is what most people picture — you own the interior of your unit, and the association owns the building and the grounds in common. A site condo is the one that surprises people. It's a detached house with its own yard and its own driveway, and it is legally a condominium. Michigan builders have platted a great deal of housing this way. A planned unit development is different again — the lots are usually owned outright, with an association that maintains common areas and enforces the covenants.
Why it matters: the loan follows the recorded documents, not the driveway. Two houses that look identical from the road can be reviewed two different ways, because one is platted as a condominium and the other isn't. The first thing I do on a Commerce file is find out which one you're actually buying.
"Warrantable" — the word that decides the file
When a property sits in a condominium project, the lender reviews the project itself and asks whether it meets the guidelines the loan program is written to. A project that meets them is generally called warrantable. One that doesn't is non-warrantable. You are not being judged in that review at all — the project is.
The kinds of things that generally come up in that review: how the mix of owner-occupants and rentals sits against a required minimum share; whether a single owner or entity holds more than a permitted number of units; whether the association is involved in litigation, and what that litigation is about; whether reserves are funded to the level the program expects, or whether a reserve study has been done at all; how much of the project's floor area is commercial rather than residential; and whether a meaningful number of owners are behind on their association dues. Deferred maintenance and special assessments can factor in too.
Thresholds and definitions vary by lender and by program, and they get revised. That's why I won't tell you a project is fine because a similar one was fine last year. It gets checked on the project you're buying.
The questionnaire and the master insurance policy
On a condo file there's a step that simply does not exist on a detached, non-condo file. The association or its management company completes a questionnaire about the project, and the lender reviews the master insurance policy the association carries — what it covers, how the deductible is handled, whether liability and fidelity coverage are in place, and whether the building is insured to the standard the program requires.
Two honest things about that step. It can add time, because the association controls how fast it comes back. And it sometimes produces answers nobody expected — a lawsuit nobody mentioned, a coverage gap, a carrier that changed terms at renewal. Better to learn that early.
So I order it early. On a detached site condo the review is often lighter than on an attached project, but "lighter" isn't "skipped," and that's worth knowing before you assume it's a plain single-family file.
You can be a perfect borrower and still lose the loan
This is the sentence I wish more buyers heard before they wrote an offer. Your credit, your income and your assets can all check out, and the file can still fall apart over something in the project that has nothing to do with you — an association in litigation, an investor holding too many units, reserves that aren't where the program wants them.
That isn't the end of it. Non-warrantable projects can often still be financed through portfolio or non-QM options, where the lender keeps the loan rather than delivering it into the agency guidelines. Those loans exist for exactly this situation. They're underwritten differently and availability varies, but a project falling outside standard guidelines is not automatically a dead deal. As a broker I'm not stuck with one company's rulebook, which is most of the value here.
The move is to check the project before the offer, not after. Send me the address and the association name and let me look. It costs you nothing and it's the cheapest hour in the whole transaction.
Loan programs I use in Commerce Township
- Conventional — the most common route on warrantable condos, site condos and PUDs
- FHA — more flexible on credit; attached condo projects generally need to be on the approved list
- VA — for eligible veterans and service members; condo projects have their own approval track
- Portfolio and non-QM — where a project falls outside standard guidelines
- Jumbo — for the higher end of the lake market
- Renovation — 203(k), HomeStyle, CHOICERenovation, with the association's approval on anything exterior
- DSCR and investor — qualified on the property, not your tax returns
- Self-employed and bank statement — for income that doesn't fit a W-2 box
First time buying? Start here.