All posts in Condominiums

Freddie Mac $1500 Sales Incentive On Condos

by Justin Miller on August 16, 2011 in Condominiums, General News with No comments

I saw this posted on HousingWire.com, “Freddie Offering $1500 For Condo Association Fees.”  I didn’t see it on Freddie HomeSteps.com site yet and that might just be because it doesn’t start until November 15th or I am not looking in the right place.

Freddie Mac is offering eligible buyers up to $1,500 for condominium association dues.

The government-sponsored enterprise said the incentive is for condos available through its HomeSteps unit, on the market for at least 120 days and sold to owner-occupants.

Buyers can apply for Freddie’s Condo Cash offer between Monday and Nov. 15, and must close before Dec. 30.

The GSE offers a two-year limited home warranty covering electrical, plumbing, air conditioning, heating and other major systems. Freddie Mac also extends discounts of up to 30% on appliances for a new buyer.

Getting a Mortgage on a Condo

by Justin Miller on May 31, 2011 in Condominiums, Conventional Loans, FHA Loans, Jumbo Mortgages with No comments

If you are looking to purchase a condominium in Fort Lauderdale or South Florida you need to make sure you are dealing with a mortgage professional who is an expert and going to educate you on the process.  Your mortgage banker or broker needs to make sure the condo is warrantable according to Fannie Mae & Freddie Mac’s guidelines or to check to see if it is an FHA approved project.

Let’s start with getting a Conventional loan on a condo in Florida.  It is easiest if you are putting down 25% on a primary residence or 30% on a 2nd home because you will get what is called a Limited Condo Approval which requires getting less documentation to get it approved and it doesn’t require the condo project to have 10% of it’s budget in reserve and a few other items.  Just because the 10% reserve requirement isn’t needed for the loan doesn’t mean it’s not important.  You need to know that if there is an assessment of some sort you will be responsible for paying it out of your pocket.

You can get financing on a primary residence on a condo in Fort Lauderdale and all of Florida for as little as 5% down but you will have to go through the full condo approval process which requires a full condo questionnaire, a copy of the budget, and the condo documents.   Currently, you will need at least a 680 middle credit score and a debt to income ratio under 41% which is much more restrictive than FHA or if you are putting down 20%.  Although you really shouldn’t be above that percentage on your debit to income ratio regardless of what is allowed.

Some of the main items that can disqualify a condo building from Conventional financing are as follows:

  • If 15% or more of the unit owners are 30 days or more behind on their condo association dues
  • If there is litigation (there are some exceptions)
  • If anyone investors owns more than 10% of the units
  • If more than 50% of the units are investment properties
  • Not enough Fidelity bond coverage
  • If there is a rec lease
  • The list goes on…..

In order to get an FHA loan it will need to be on FHA’s Approved Condo list.  If it is not an FHA approved condo you have to get the how condominium project approved which is very involved and can take 6-8 weeks with FHA.

What You Need To Know When Buying A Condo

by Justin Miller on June 29, 2010 in Condominiums, Mortgage Education 101 with No comments

Anytime I get a call and someone tells me that they are buying a condo I begin to cringe.  The reason I cringe is because there are a lot of items that can prevent a deal from not closing and I don’t’ ever want that to happen to one of my clients.  I know I say time and time again but I cannot stress this enough when it comes to condos, you MUST USE A CONDO EXPERT, PERIOD!

How do you if the person you are speaking to is a condo expert?  You tell them the name of a condo you are trying to purchase and see what they say.  The correct response your Mortgage Professional is that they are going to look the condo up using their resources, would like the name and number to the association to ask questions pertaining to the condo approval, and talk to you about advantages of putting 25% down on a primary residence or 30% down if it is a 2nd home in order to get a “Limited Review Approval.” 

Although these measures are to help protect the bank they in turn can help protect you as a buyer.  The lender wants to make sure that their collateral is going to be there in X number of years and so should you. 

If you are getting an FHA loan your mortgage professional should check FHA’s Approved Condo list found at https://entp.hud.gov/idapp/html/condlook.cfm.  If it is not on the list you will have to get the full condo project approved which can take up to 4-6 weeks as of right now.  The condo will have to be in great financial shape and meet a lot of guidelines. 

If you are you are getting a Conventional loan and do not receive the Limited Review Approval then you will have to get a full approval.  It is a little easier with a Conventional loan than an FHA loan but not much. 

Each bank can have their own “overlays” that need to be followed.  The main items to look out for how many units are 30 days or more behind on their dues, is there any litigation, how much Fidelity Bond coverage do they have, how much do they have in reserve, amount that are owner occupied/2nd homes, and if they have a right of first refusal that can affect the mortgagee.  There are many more but this should give you a good idea.