Friday, February 05, 2010

Condo Financing Come Back

When a buyer wants to buy a condo and is financing that condo, its like finding a needle in haystack after narrowing down the buyers parameters.  This is because all lenders regardless of downpayments do not want to lend on condos unless the condo community meets all the strict Fannie Mae guidelines.  With condo communities running into financial challenges after owners stop paying their HOA fees has caused problems for financing approvals, and resulting declining values.

Florida one of the hardest hit condo markets in the nation, because of this Fannie Mae has lauched a new program to "loosen the reins" on their financing requirements.  However, there is a task team that is reviewing condo communities on a case-by-case basis rendering them a "special approval" only for the State of Florida.  This is being done in effort to resurge the condo market.  Even though condo market was hardest hit in Orlando, Miami seems to be the primary market.  In fact, you can go onto efanniemae.com to review approved communities, and I am not seeing many new communities that did not already exist to the Orlando list.

Once this takes off and puts more condo communities in the market where buyers can get financing, condo sales and values will start to rise in these communities.  If you are a cash investor, its important you do not wait to buy as volume of inexpensive properties will be lower as the market opens up.

This is a positive steps to bringing an affordable housing option again to primary home owners.  However, until a buyer gets under contract and community gets under review for financing, a buyer may not know upfront whether community will pass for their financing approval.  This article can be read here at Orlando Sentinel.