Q: I live in a condominium unit that I bought two years ago. I am now trying to sell it because I am leaving the area. There are about as many investor (rental) apartments in my building as there are residential owners. Recently I learned that I may have difficulty selling my unit because of this high investor ratio. Can you explain what this is all about?

A: The answer has to do with the secondary mortgage market.

When a person buys a condominium apartment and attempts to obtain conventional financing, chances are that the lender will be selling the loan package to a secondary mortgage market institution. For a mortgage lender such as a savings and loan association to continue to make loans, it has to have a continuous source of money. One source is the secondary mortgage market, where institutions such as the Federal Home Loan Mortgage Corp. or the Federal assist in moving large volumes of dollars from one source to another.

For example, if an investor in a western state finds that the demand for mortgage money is not particularly great in that location, through a highly complex process the investor's funds are made available to other mortgage-lending institutions under the auspices of the secondary mortgage market.

But because the lender wants assurances that the money will be secure, a uniform set of guidelines has been developed. There are strict lending criteria, the mortgage documents must contain certain basic uniform requirements, and the local lender must satisfy itself that these criteria have been met before the mortgage will be committed to an individual purchaser. h

One of these criteria is a requirement that deals with owner occupancy of condominium units. For newly constructed or renovated condominiums, the secondary mortgage market requires that at least 80 percent of the units sold in the condominium project be sold to individuals for use as their primary year-round residences.

For condominium tenants whose homeowner associations have been controlled by the unit owners (other than the developers) for at least two years, the secondary mortgage maker requires that 60 percent of the units in the project be occupied by unit owners as their primary year-round residences.

In recent years, to comply with the secondary market requirements -- including the occupancy rules -- mortgage lenders have begun to make spot checks of condominium projects. Indeed, there have been occasions when mortgages have been bounced back from the secondary mortgage market to the originating lender after it was determined that the borrowers were not owner-occupants.

Thus, for potential buyers to obtain a conventional mortgage, it will not only be necessary for them to qualify in terms of income and assets: They will most likely have to certify that they will be moving in. More significantly, your condominium association will have to certify that at least 60 percent of the unit owners in the project are using their apartments as primary residences.

One can argue that the owner-occupancy requirements are too restrictive. What practical difference does it make whether the apartment is occupied by an owner or by a tenant, providing, of course, that the condominium board of directors has control over the unit owner. If a tenant is disturbing others, or is destructive, the board has the authority to take legal action to protect the integrity of the condominium association.

The fact remains, however, that the secondary market requirements have to be met. Often FHLMC and FNMA are the only game in town. If you want their assistance, you have to play by their rules.

Many condominium buildings in this area now have less than 60 percent owner-occupants. As a result, owners in those buildings find it quite difficult to get secondary market approval for their prospective purchasers, without having to go to the lending institution for a waiver of their requirements