On January 15 of this year, Fannie Mae implemented stricter conditions for condo loans.  The goal is safer loans, however it also makes getting a loan for a condo more difficult.

Key items to be aware of when seeking a condo loan include:

  • New and recently converted condo projects must have at least 70% of the total units in that project under a contract or conveyed as a principal residence or second home.  This number used to be 51%.
  • No more than 15% of the total units can be 30 days or more past due on their condo association dues.  This applies to new and established condo projects.

Besides the restrictions, Fannie Mae is also adding a fee of 0.75 % to the total loan amount on certain mortgages secured by a condo.  The borrower would pay this fee, unless the borrower can come up with at least a 25% down payment of the total purchase price.

In short, there is money to be borrowed for condos, just keep in mind that the borrower must be very well qualified.

The president of the National Association of Realtors has sent a letter to the director of the Federal Housing Finance Agency saying that now is not the time to increase fees for borrowers.

 

Material for this blog is from the April issue of the Florida Realtor magazine.