Condo Financing Tightens in Wake of Florida Disaster
The two largest purchasers of conventional mortgage loans, Fannie Mae & Freddie Mac have recently issued temporary guidance that may dampen the condo market this spring.
The resulting collapse of the Champlain South Tower in Surfside, Florida has raised concerns surrounding the safety and soundness of residential buildings with aging infrastructure and significant deferred maintenance.
Since most condos were built more than 20 years ago, the mortgage giants are seeking to protect stakeholder’s interests by making underwriting guidelines a bit more restrictive for condo projects.
Condo projects that require critical repairs, has material deficiencies, and significant deferred maintenance, remains ineligible until the required repairs have been made and documented.
Special assessments used to fund repairs related to safety, soundness, structural integrity, or habitability must be fully completed, or the project is not eligible.
If its determined that special assessments will not satisfactorily cure the deferred maintenance or unsafe conditions, the project is also ineligible for financing.
To avoid potential setbacks buyers, sellers, and realtors would do well to perform some due diligence before accepting a listing or making an offer to buy a condo whenever a mortgage will be used for acquisition.
Reach out should you need help with financing your condo.
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