Wouldn't you know it.. just as the California real estate market starts to show a few signs of stabilizing... the Feds throw a wrench in the works. Fannie and Freddie, in their infinite wisdom, have made some major Mortgage loan changes for townhome/condominium buyers who are looking at properties with loans under $729,750.

In the South Bay- Beach Cities that means entry level properties in Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo. It will hit buyers of 55+ units in Redondo, Torrance and Palos Verdes who are looking for a loan. It will affect people buying entry level ( $725,750 or less) townhomes/condominiums in all the South Bay. Want to buy a small unit as a vacation property along the Esplanade... it will cost you more. How much more depends on a number of factors.

So just what have the powers that be been doing.... The basics are that you will need higher FICO scores, you will probably need a larger down payment then you did last month unless you are looking at FHA financing. Your appraisal fee will be higher and must be paid upfront and you will be paying higher upfront fees from .75% to as much as 3% to get that government backed loan. However if you are looking for a jumbo loan on a higher priced property... say one of those spiffy townhomes with great views in Manhattan or Hermosa... then it's business as usual.

I understand the idea behind these changes is because of the numerous problems with large condo projects in other states that went down the drain. However in most of California, townhomes/condominiums are our form of affordable housing. I'm not sure how these changes will affect buyers in the South Bay as we don't have a lot of large developments.... but I expect we will soon find out. It wouldn't surprise me to see an easing of some of the new rules once the administration realizes that this may not be the best move in a housing crisis.