This is an emergency.
There are some 43,000 condo complexes in the U.S., containing almost 7.5 million units – mainly concentrated in urban areas with limited land availability.
That is why densely populated and very urban countries like Thailand, China, Singapore, and the Philippines also have a lot of condos.
So, while condos seem prevalent to those of us in urban areas, they are only a small fraction of America’s total housing stock of about 125 million units.
Here is the issue: Grok (AI) says that only about 70% of those 43,000 complexes are eligible for Fannie Mae and Freddie Mac financing, making almost 13,000 of those complexes ineligible.
And given that Grok also says that I am a young, 6-foot-3-inch-tall wide receiver for the Philadelphia Eagles (with long dark hair), it’s possible that Grok is overstating the eligibility numbers.
The Problem
And, here is the problem: If a condo complex is non-warrantable or not eligible for Fannie Mae or Freddie Mac financing, any financing it is eligible for will require much larger down payments (20% to 25% vs 3% to 5%), much higher interest rates (1% or more), longer closer periods in most cases (21 to 30 days vs. 12 to 15 days).
A few weeks ago, I published this blog: What Agents Should Do First Before Listing Or Offering On A Condo.
And in that blog, I implored agents on both sides of a condo transaction (PRIOR TO LISTING OR OFFERING) to reach out to our condo desk – condoteam@jvmlending.com – to find out if a condo is warrantable (approved by Fannie and Freddie) or not.
But, far too many agents have not seen that blog and are 100% unaware that they desperately need to assess warrantability and financing options BEFORE offering on or listing a condo.
Our Client Advisors are still fielding so many calls from confused agents in fact that they asked me to blog about this again (even though I’ve beaten this horse into a slimy pancake already).
Why It’s an Emergency!
It truly is an emergency because so many condo complexes are now ineligible for Fannie and Freddie financing – primarily because of new legislation (CA’s balcony and deck law), condition issues, and insurance problems.
Financing options tremendously impact condo values (and potential listing prices) and whether or not buyers can afford to even offer on a particular condo.
Condos Without Borders
That is why we set up our new charity: Condos Without Borders – where our condo desk delivers emergency financing eligibility analyses for condos in all areas – including war zones, natural disaster areas, and grassy waterfronts with sun-dappled vistas.
TLDR: Please, once again, reach out to our Condo Team if you are offering on or listing a condo. It is absolutely essential to understand warrantability and financing issues before doing either.
And, more importantly, please tell everyone you know about our new charity, as we are happy to help every agent, buyer, and seller in the condo market.
