Condo Rules

Like Homeowner Association rules, sometimes Fannie and Freddie also place rules on the mortgaging part of buying a condo. The rules have  tightened up for condos that are purchased that are also rented out in the short-term. Recently Fannie Mae and Freddie Mac tightened up  rules about units that are located in high-rent areas that are popular for vacations.

Most of the changes are a result of the two government-based mortgage backers seeking to reduce their footprint in housing, especially vacation housing. Many real estate professionals and bankers are concerned that the reduction in Fannie’s and Freddie’s interests could also result in a reduction of available and affordable housing options.

We’ve lived with the new rules for about six months now since the changes went into effect on December 7. The eligibility process by Fannie Mae to determine whether condo units are impacted is not negotiable by those that own units or by a condo association associated with the building.

The National Association of Realtors has been vocal on the issue saying that there is a concern that credit might be  impacted for those owners or those buyers who seek to be first time home owners that are purchasing the properties as primary residences. Fannie Mae has responded that it is only seeking to clarify its policies and thus the rules should be clear at the start of any new condo  project’s construction.

It appears as though units that will be owned by individuals across the board should be eligible for financing.  Conversely, buildings that are being built to be owned and managed by one entity may be ineligible for the federal backing.

According to Realtor.com, there are 17 million privately owned condos across the United States. Condominiums have long offered homeowners the chance to find a perfect compromise between owning a home and managing its maintenance. Yes, condominium owners pay monthly or yearly fees to offset common area maintenance, but many apartment complexes are charging for such maintenance these days.

Condominiums are a great way for homeowners to enjoy more amenities without owning a larger property and enjoy special incentives for buyers to purchase them. Working with a licensed mortgage broker gives you a lot of options to find an FHA-approved building. Many properties are under construction and offer a great way to get into home ownership. Understanding what you will be responsible to pay for and what is covered as a part of your purchase is something that Finance of America mortgage is helping so many people to take advantage of purchasing a home while the rates are so very affordable.

Know your options. Know your lending opportunities. Know the resources within your community.

Be sure to work with a licensed advisor that you know serves your community and will be there for you for the duration. Call 360-607-9312 or email MPattullo@FinanceOfAmerica.com for help preparing your credit application to best evaluate your mortgage options. We are your local advisor.

We lend where we live,
Mike