Fannie Mae Announces Special Program to Support Florida Condo Sales
Fannie Mae will Evaluate Whether Hundreds of Condominiums Throughout the State of Florida Qualify for Financing Despite Published Guidelines.
It has been harder and harder to obtain loans to purchase condominiums in the past two years. Fannie Mae, Freddie Mac and FHA all published eligibility guidelines basically precluding borrowers from obtaining favorable loans to purchase condominiums if:
- More than 15% of a condo project units are more than 30 days delinquent on HOA dues. This was an existing guideline that is now being applied to new condo projects.
- Fidelity insurance, ensuring that homeowner association funds are protected, must be in place in adequate amounts.
- The borrower didn't obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. A condo-owners policy, known as an HO-6 policy, covers personal property, personal liability, and the physical unit from the studs and in. Many policies also include special assessment coverage or the option to include a special assessment coverage rider.
- More than 10% of a project is owned by a single entity.
- More than 20% of a project consists of non-residential space; or
- The association didn't have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible.
However, on January 7, 2010, Fannie Mae announced it has appointed a team of employees to determine whether hundreds of condominium projects in Florida are entitled to relief from these guidelines.
Want to learn more about this new development and what steps your community can take to improve mortgage options? Then attend the CAI-SEFL Annual Day of Education and Exposition being held on January 30 at the Signature Grand in Davie, Florida where Fannie Mae's Senior Risk Manager, Joseph L. Minnich III, will deliver the keynote address. For the past six months Mr. Minnich has been working with the Florida Project team to develop a program to provide stability and liquidity to Florida Condominium Projects. He will explain the process and be available to answer questions. Don't miss it.
How can I get registered for the January 30 CAI SEFL conference regardign Fannie Mae? This is very important to our association and I would like to attend. Can you advise any cost associated with the registration?
These six items weren't as bad as the items that designate them as Condotels. If we could get some relief from being classified as Condotels, a whole new avenue of financing would be available.
What is Fannie Mae planning to do about making the condos that it now possesses "current" as far as maintenance fees are concerned? We currently have 2 such units and are owed over $16,000.00. We, like many other communities, are in desperate need of these monies to maintain our level of services to the community.