It's Now Harder to Get a Mortgage For Your Condo Purchase

As if the current guidelines weren't stringent enough with regards to condo financing, Fannie Mae and the FHA have introduced new wrinkles into the requirements to get a mortgage. Fannie has only made one change to its requirements -- they now will require a minimum credit score of 620, up from 580 previously.

However, the FHA has made very drastic changes to its rules. Over the past few months, many buyers have expressed interest to purchase a condo in Downtown Miami using FHA financing. The easiest way to get a loan is to purchase in a FHA approved miami condo building, but the FHA also had a "spot approval" process where you could get a loan in a non FHA approved building. Under the new guidelines:

• "Spot approvals" are eliminated, and now the entire project has to meet FHA approval before a borrower can get an FHA-insured loan.
• A maximum of 30 percent of the condo project's units can have FHA-insured mortgages. There was no such limitation previously.
• Before the FHA will insure a mortgage on a condo, at least half the units must have already been sold. Again, there was no such limitation previously.

Ouch! So buyers are now limited to FHA approved buildings where half the units are sold and not more than 30% of the units have FHA loans. Good luck, considering there are only around 10 FHA approved buildings in the greater downtown Miami area.

Both policies go into effect Nov 1.