Ch, Ch, Ch, Changes to C, C, C, Condos

Reblogger Gabe Sanders
Real Estate Agent with Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales 3090099

This is good news for those looking to finance the purchase of a condo:

 

Original content by Rob Spinosa NMLS: 22343

Ch, Ch, Ch, Changes to C, C, C, Condos

 

At various times over the last 10 years, getting a mortgage on a condominium in California could have been quite the challenge for a homebuyer.  However, some changes that will go into effect at the end of June, 2018, will reflect Fannie Mae's (FNMA) increased flexibility and sensibility with lending on condo, co-op and planned unit development (PUD) projects.  We're going to focus here just on the condo part and explain the key elements that should make it a bit easier for some buyers in the months ahead.

 

Single-Entity Ownership

Single-entity ownership poses a risk for a condominium lender because should that single owner who owns a high percentage of the units in the complex run into financial difficulty or do something financially irresponsible, it could materially impact the financial health of the entire complex.  The changes in our update here allow the following:

  1. Waiver of the single-entity ownership requirement when the purchase transaction will result in the reduction of of single-entity concentration.  
  2. Units held by non-profits, affordable housing programs or institutions of higher education are exempt from the calculation.
  3. Single-entity ownership in projects with 21 or more units is increased to 20% (from 10%).

 

Commercial Space

Projects can now exempt commercially owned or operated parking spaces from the project's commercial space calculations.  This item, for example, can be a big factor in the city of San Francisco.  Another significant change is the allowance of commercial space in the project to increase from 25% to 35%.

 

Limited Reviews

Primary home purchases of condo properties have long benefited from the "limited review" which is an automated and streamlined process that determines the eligibility of the condo project very early in the loan process.  Up until now, a limited review was never an option on an investment property so as a lender, we knew that when an investor went into contract on a condo, we'd have to obtain all of the condominium documents (CC&R's, budget, condo questionnaire, etc.) to approve the project itself.  Now, with a limited review a possibility up to a loan-to-value of 75%, many condo buyers will avoid the high bar that had been previously set.

 

Two- to Four-Unit Condo Projects

Waive project review requirements aside from some basic requirements (insurance, for example).

 

These are some far out changes to condos and I can certainly see them immediately helping future generations of buyers and investors.  And they're exactly the sorts of common sense adjustments the government-sponsored entities should be implementing.  If you're looking to purchase or refinance a condominium in California, or if you've tried and failed to finance a condo in the recent past, let me know if I can help at any time. 

 

Ground control to Major Tom,

 

 

Robert J. Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343 
Cell/Text: 415-367-5959 Fax: 415-366-1590
rob.spinosa@rate.com

Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709
 

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.

 

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood ChicagoIL 60613 - (866) 934-7283

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Rainmaker
4,432,093
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for reblogging the post. I hope others will read it too and learn from it 

Jul 02, 2018 02:54 AM #1
Rainmaker
3,214,987
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Oh hurrah...you gotta love Fannie and flexible in the same sentence !

Jul 02, 2018 03:27 AM #2
Rainmaker
5,313,694
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much, Gabe, for sharing this excellent reblog selection.

Jul 02, 2018 05:02 AM #3
Rainmaker
3,187,111
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gabe it has been a while since I read anything by our friend Rob Spinosa  clearly he still provides good information, Endre

Jul 02, 2018 10:36 PM #4
Rainmaker
2,742,376
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

These two things are not mutually exclusive certainly in there would be more changes to come, I assume

Jul 02, 2018 11:37 PM #5
Rainmaker
4,796,627
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thank you for stopping by and taking the time to read my re-blog.

Aug 01, 2018 07:00 AM #6
Rainmaker
4,796,627
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for your comments. It’s always good to hear from you.

Aug 01, 2018 07:00 AM #7
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Rainmaker
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Gabe Sanders

Stuart Florida Real Estate
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