Buying a condo with a mortgage may soon get more complicated. Here's why
📰 source: cnbc_topnews · 💼 business
fannie mae and freddie mac are tightening condo-mortgage rules starting aug. 3. many purchases will now need a full review of the condo association's finances, reserves, and building condition, instead of a streamlined check. the goal is to flag buildings with financial or structural problems.
roughly 40% of condo purchases with a mortgage used the limited review and could now face the longer process, says dawn bauman, ceo of the community associations institute. mortgage lender max slyusarchuk of ad mortgage in fort lauderdale says the change "will make the process take much longer and will result in a lot of disqualifying applications." the federal housing finance agency hasn't responded to a request for comment.
another rule kicks in jan. 4: condo associations must set aside at least 15% of annual budget for reserves, up from 10%. trade groups want a one-year delay for that requirement, saying many boards don't know about it. buyers could face denials or higher rates if their building doesn't comply, and cash buyers may move faster.
why it matters: condo buyers face stricter mortgage scrutiny and possible denials, while cash buyers gain an edge in a tight housing market.
source: cnbc_topnews
sentiment: -0.30 · impact: 0.40