The current real estate market is all the more frustrating for how tantalizing it is -- the market for new condominiums and apartments in Manhattan (and elsewhere) is full of great deals, but the still-struggling credit market has made it harder than ever to get financing for condominium purchases. New guidelines issued by the Federal Housing Administration and Fannie Mae clear things up somewhat, though, and are good news for home buyers in New York -- very friendly financing and government-backed loans are available for those buying condos in FHA-approved developments. The question, then, is this: what makes a Fannie Mae/FHA-approved condo project an FHA-approved condo project?The short answer is "a healthy condominium development." The longer answer, via Condo.com, is: The condominium projects that are approved by Fannie Mae must have less than 15 percent of condo owners in the building delinquent on their condo or Home Ownership Association fees. In addition, the association must have enough funds on hand to meet the deductible of their insurance policy. Other conditions include the following: At least 70 percent of new condo units must be pre-sold, at least 10 percent of the operating budget must be set aside for reserves, projects can not contain more than 20 percent non-residential space, and no more than 10 percent of units may be owned by a single entity. In some cities, that's a high standard. But New York City is not Jacksonville, and there are plenty of new condominiums in Manhattan that qualify. Condo units in approved developments are stronger investments than others -- given that they're in financially healthy condominium developments, after all -- and it's also easier for home buyers to obtain financing for condo purchases in approved developments, most notably through mortgages guaranteed by Fannie Mae. Given those buyer-friendly mortgages and a wealth of government backed home loans that afford interested buyers such benefits as low down payments (as low as 3.5 percent) and allow for speedier qualification and purchase, it's definitely worth checking out Fannie Mae's list of accepted condominiums and co-ops in New York. The list of Fannie Mae approved developments in every state is here.
Mighty Healthy: Understanding FHA and Fannie Mae Condo-Financing Guidelines
Posted on Tue, 2009-10-27 14:12