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New rules raise the bar for condo mortgages in Florida
MIAMI – Jan. 26, 2009 – Lending giant Fannie Mae is slapping tough new requirements on mortgages for Florida condos, moves that analysts believe will make it even more difficult to sell units in buildings already starved for residents and struggling financially.
The standards, which took effect last week and apply only to Florida, include requiring that no more than 15 percent of a building’s unit owners be delinquent on association fees as a condition of funding home loans to new buyers.
Fannie Mae buys 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.
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What is an FHA loan, you ask?
Good question. In all truthfulness, there really is no such thing as an FHA Loan. The FHA (Federal Housing Administration) doesn't really fund your mortgage at all. In fact, the FHA doesn't even buy or underwrite loans. The FHA provides mortgage insurance to help consumers become homeowners. To put it another way, the FHA insures mortgage companies from losses so on the slight chance a buyer defaults on their mortgage, the home loan lenders will get their money. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan. That's pretty much it. To keep things simple, we (and nearly all other mortgage lenders), call any loans insured by the FHA, "FHA Loans." | |
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Additional Ineligible Projects
Fannie Mae is adding three new characteristics to the list of ineligible project types
currently identified in the Selling Guide, Part XII, Section 102: Ineligible Projects. Fannie
Mae considers condominium projects with the following characteristics to be ineligible
for delivery to Fannie Mae:
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New projects where the seller is offering sale/financing structures in excess of FannieMae’s eligibility policies for individual mortgage loans. These excessive structures include, but shall not be limited to, builder/developer contributions, sales concessions, HOA or principal and interest payment abatements, and/or contributions not disclosed on the HUD-1 Settlement Statement.
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Projects where more than 20 percent of the total space is used for non-residential purposes.
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Projects where a single entity (the same individual, investor group, partnership, or corporation) owns more than 10 percent of the total units in the project.
Clarification of Owner-Occupancy Ratio Requirements
Fannie Mae requires that established condominium projects consisting of attached units have an owner-occupancy ratio of at least 51 percent at the time the loan is originated (purchase or refinance) if the mortgage loan being delivered is secured by an investment property. Established projects where borrowers will occupy the unit or use the unit as a second home are not subject to any owner-occupancy ratios.
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Due to current market conditions, many condominium projects are experiencing higher numbers of financial institution- owned REO units, which many lenders may be counting as non-owner-occupied under Fannie Mae’s current requirements. Fannie Mae is clarifying its condominium project owner-occupancy ratio policy to include REO units that are for sale (not rented) as owner-occupied units in the owneroccupancy ratio.
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Projects where a borrower is an investor and the project does not meet the owneroccupied ratio of 51 percent will only be eligible if the lender submits the project to Fannie Mae for review under PERS and the project is approved or as a single-loan project eligibility waiver and Fannie Mae approves the waiver based on its review of the overall risk of the project.
Want Full Details?
Just Click The Link: FHA Condo Loan Requirements
FHA Approved Florida Condo’s.
Just Click The Link: FHA Condo's
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