FANNIE MAE ANNOUNCES SPECIAL PROGRAM TO SUPPORT FLORIDA CONDO SALES
Lisa Magill; Becker & PoliakoffPrintEmailEDITED Fri, 16 April 2010 07:11:35 EDT
It has become increasingly difficult to obtain loans to purchase condominiums over the past two years. Fannie Mae, Freddie Mac and FHA have all published eligibility guidelines that preclude borrowers from obtaining favorable loans to purchase condominiums if:
- More than 15% of a condo project’s units are more than 30 days delinquent on HOA dues. This was an existing guideline that is now being applied to new condo projects.
- Fidelity insurance, ensuring that homeowner association funds are protected, must be in place in adequate amounts.
- The borrower didn't obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. A condo-owners policy, known as an HO-6 policy, covers personal property, personal liability, and the physical unit from the studs and in. Many policies also include special assessment coverage or the option to include a special assessment coverage rider.
- More than 10% of a project is owned by a single entity.
- More than 20% of a project consists of non-residential space; or
- The association didn't have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible.
However, on January 7, 2010, Fannie Mae announced it has appointed a team of employees to determine whether hundreds of condominium projects in Florida are entitled to relief from these guidelines.
Would like to learn more about this new development and what steps your community can take to improve mortgage options? Attend the CAI-SEFL Annual Day of Education and Exposition being held on January 30 at the Signature Grand in Davie, Florida. Fannie Mae's Senior Risk Manager, Joseph L. Minnich III, will deliver the keynote address. For the past six months Mr. Minnich has been working with the Florida Project team to develop a program to provide stability and liquidity to Florida Condominium Projects. He will explain the process and be available to answer questions. Don't miss it.
Becker & Poliakoff, P.A. - www.becker-poliakoff.com - is a commercial law firm with offices in Florida, in New York City, Nassau, Bahamas, and Prague, Czech Republic, plus affiliated offices in France and Israel. The firm provides legal services with respect to homeowner and community association law in addition to a variety of other legal service.