Fannie Mae (the biggest player in the mortgage market) has tightened the rules for loans when a home buyer wants to purchase a townhome or condo for sale. This is happening all over the country including in Barrington, Deer Park, Palatine, Lake Zurich and the surrounding area. The new rules were made to try and protect the home buyers and lenders, unfortunately it is now more difficult for condo and townhome sellers to sell. This could put a damper on the recovery of townhome and condo sales, and in then affect associations in a negative way.
Some of the key points:
They want to know that it is in good condition.
If a condo or townhome is new, they want to be sure there are enough owners (70%)to pay for maintenance etc. to ensure the value doesn’t go down.
If more than 15% of the other owners in the association are delinquent on their association fees, Fannie Mae will reject the mortgage.
All this will hurt the new construction the most as the 70% requirement is going to be hard to reach if the new condo or townhome buyers can’t get a loan/mortgage.
There is some way to work this out, we have awesome lenders that are working hard on figuring out other programs or loans for the buyers. If you are in this situation, give us a call and we can refer you to a lender that can get it done if at all possible.
Posted By: Julie Anne – The Julie Anne Real Estate Team at Keller Williams Success Realty