Fannie Mae has placed tough new requirements on mortgages for Singer Island condominiums, as well as, the rest of Florida. They buy the majority of home loans from lenders, so it wields significant power in the making of mortgages. Fannie-backed loans generally offer the best rates and lowest down payments for borrowers.
The standards, which took effect in late January 2009 and apply to only Florida, include the requirement that no more than 15 percent of a building’s unit owners can be delinquent on their association fees as a condition for funding home loans to new buyers.
The new rules come at a time when condo buyers already face difficulties getting mortgages. Many banks over the past two years have dramatically pulled back on condo lending, requiring down payments of up to 40 percent in new buildings. Some lenders even have blacklisted condo buildings, citing a high risk of price declines and defaults.
The new conditions include:
- No more than 15 percent of unit owners can be 30 days or more past due on association fees.
- For new condo buildings and condo conversions, at least 70 percent of units must have been sold or put under contract. That’s up from 49 percent previously.
- Fannie will have to review condo buildings itself to make sure they meet Fannie requirements – at the lender’s expense. Before, Fannie relied on the lenders to perform these reviews.
The ultimate benefactors are the borrowers who know they are moving into a condo complex that is adequately funded.
For more information on specific condominium sales activity contact Jeannie at 561-889-6734 or email her at [email protected]