Fannie Mae / Freddie Mac changes affect City Mortgage Program...

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Mortgage and Lending with Wintrust Mortgage

Fannie Mae and Freddie Mac have made some recent changes that will significantly impact many buyers as well as developers.  If a borrower is putting down less than 10%, Fannie Mae and Freddie Mac will require a full review of the condo project.  This full review is a "condo questionnaire" consisting of literally 20 questions that Fannie Mae and Freddie Mac want to know about the condo project before they will approve the loan.

Many loan programs, including the City Mortgage Program (4% Gift), are sold to Fannie Mae and Freddie Mac and must concur with their guidelines.  Of the 20 questions, the ones that jump out are the first 3:

1.  Total number of units in the project

2.  Total number of units sold

3.  Total number of units closed

Add up the Total number of units sold (under contract but not yet closed, and include the subject property) and the Total number of units closed, and this must be 51% or greater than the Total number of units in the project.  If this is not the case, then Fannie Mae or Freddie Mac are not buying that loan, and many of the loan products, including the City Mortgage Program, will not work.  The only way they can work is if the condo project is FHA approved.  Again, remember that the full review of the condo is when a borrower is putting down less than 10%.  There are lenders out there that can do a "limited review" of the condo with $0 down, but they are not Fannie Mae or Freddie Mac loans. 

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