Tag Archive for: condo

Shock: Crashing Inflation Bringing Down Rates! Townhouse Vs. Condo Confusion – More Important Than Ever!

/in , , , ,
“Condo Concerns” include low owner-occupancy ratios, HOA litigation, low reserves, and insufficient coverage under the master insurance policy. These issues often render condo projects non-warrantable or ineligible for Fannie, Freddie, and competitive jumbo financing. And – even when condo issues are not present, condos are subject to higher interest rates when borrowers have an equity cushion of less than 25% (for a refi) or put less than 25% down. Townhomes are also known as PUDs, detached PUDs, rowhomes, patio homes, zero-lot-line homes, and attached single-family residences. The confusion comes from the fact that they often look just like condos! And condos often look just like townhomes – particularly when they are built in an attached rowhome or two-story townhome style. The primary difference is that with townhomes, owners own the lot beneath their unit. With condos, the owners only own a pro-rata portion of the entire lot under the entire condo complex.Read More

Condo Financing Hits Peak Debacle – But We Can Help! The War Ends For The 27th Time

/in , ,
330% Increase in Condo Projects Losing Fannie Mae Eligibility! Some 1,700 condo complexes are non-warrantable now, meaning they are no longer eligible for Fannie/Freddie financing. Calling this a debacle is an understatement. That is because losing financing options wipes out entire contingents of buyers (especially low-down-payment buyers). Depending on the issues with the complex/HOA and the financing options available, we have seen complexes lose 25% to 50% of their value when they become non-warrantable. In the olden days, the issues that made condos non-warrantable included: Litigation involving the HOA Owner occupancy ratios (need to be over 50% - for FHA and investor financing only) Too much commercial use (35% limit) Structural issues noted in the HOA minutes or MLS Concentration Issue (one owner can’t own more than 20% of the units) But today, the two big issues we see over and over are insufficient reserves and/or inadequate insurance. What happened? Inflation pushed up repair costs, condos got old, insurance costs went way up, and the occasional complex fell into the ocean (that seems to make lenders nervous).Read More

How to Find Out If a Condo Is FHA Approved

/in , ,
Before you write an offer on a condo, there is one question worth answering first: is the complex FHA approved? The answer affects your down payment, your rate, and how many other buyers you are competing with. But here is what most buyers do not realize: a condo not appearing on the FHA approved list is rarely a dead end. There are still solid financing paths available, and checking the status takes about five minutes once you know where to look. Here is exactly how to do it and what your options are depending on what you find.Read More

Markets Over Emotions; ADU’s Need To Be Permitted If Using Income; HOA Dues Whack Purchase Power!

/in , ,
I woke up certain today that rates would be 1/4% HIGHER. I was very wrong. Oil prices are only a tad higher, and interest rates are holding, as investors clearly seem to think the ceasefire will hold. Read More

How To Buy A Condo In Illinois

/in ,
If you’re thinking about buying a condo in Illinois, there are a few things you’ll need to know. This blog post will cover the basics of purchasing a condo in Chicago, from financing options to understanding HOA fees.Read More

What Agents Should Do First Before Listing Or Offering On A Condo

/in ,
This Is the First Thing Every Agent Should Do Before Listing or Offering on a Condo: Make sure the complex/HOA is “warrantable” or approved for financing by Fannie Mae and/or Freddie Mac.Read More

10 Things First-Time Buyers Should Know

/in ,
We hired a full-time condo expert away from Chase Bank, and he does nothing but help us analyze condo projects for eligibility and financing options.Read More

More Mortgage Concepts Every Agent Should Know

/in ,
There are three primary channels through which borrowers can obtain mortgage loans: (1) commercial banks and credit unions; (2) mortgage banks; and (3) mortgage brokers. Commercial banks like Chase and Wells Fargo hold deposits, offer checking accounts, make commercial loans (and do all traditional “banking” activities) as well as offer mortgage loans. They also hold loans in their portfolios.Read More

Can’t Waive Contingencies For Condos – Or Give Fast Answers

/in ,
In December, I wrote these two blogs: Can’t Waive Contingencies For Condos and Have A Condo Listing? What Listing Agents Can Do To Ensure Faster Closes & More Marketability  I […]Read More

This Is Huge: FHA Spot Approvals Work For Non-Warrantable Condos

/in ,
Not all non-warrantable condos are eligible for alternative financing, but if there is a way to finance them – JVM will find it. In any case, we have discovered that FHA is (shockingly) often much more flexible than Fannie and Freddie when it comes to approving condominiums for financing.Read More

Have A Condo Listing? What Listing Agents Can Do To Ensure Faster Closes & More Marketability

/in ,
No matter how strong a borrower is, lenders will often recommend not waiving contingencies if the borrower is buying a condo. This is because lenders need to ensure that the condo complex is “warrantable” – or compliant with the criteria set forth by Fannie Mae, Freddie Mac, or similar entities to make the condo eligible for financing.Read More

We’re Seeing More Non-Warrantable Condos Than Ever Before

/in ,
After the 2008 Great Financial Crisis, we saw an enormous number of non-warrantable condos. The biggest issues then were HOA (Homeowners Association) dues delinquencies and under-funded HOAs in general, as […]Read More

Non-Warrantable Condo Financing; 3 Reasons We’ll See Lower Rates After Election

/in ,
Interest rates went UP the last time Trump was elected because of expectations that spending would increase and/or that the economy would grow faster. I suspect we are seeing the same effect this time before the election because the betting markets believe Trump will win with more certainty than before. Read More

Health and Safety Issues Delay & Kill Deals!

/in ,
Health and safety issues are often very similar to structural issues, and they often overlap each other. The problem is that once they are called out, lenders won’t lend against a property until the health and safety issue is addressed.Read More