Fannie Mae Tightens The Noose (Again)

Effective March 1, Fannie Mae (FNMA) the folk the make conventional loans “conventional” are planning to further tighten the condo guidelines on which mortgages they will buy on the secondary market. It could be argued that it makes no difference since they are already impossible in most cases, leaving only FHA backed loans as an option.

Additionally, in the case of bank owned condos cash is usually the only option anyway - so again, perhaps it makes no difference.

In today’s Orlando Business Journal (OBJ), a Fannie Mae spokeswoman is quoted: “The pre-sale requirement is intended to ensure a project is well-managed and able to sustain itself financially at times when there are a large number of condo fee delinquencies.”

Anjali Fluker at the OBJ repports that under the new rules, pre-sale requirements will go from 50 to 70 percent. And no more than 15 percent of the community’s units can be more than 30 days late.

Fifteen percent!? Name one condo association in Orlando that has a delinquency rate of less than 15 percent… (“Johnny, put your hand down. We’re talking HOA delinquency, not juvenile delinquency.”)

Click newspaper image for full article.

2 thoughts to “Fannie Mae Tightens The Noose (Again)”

  1. I think the large builders/developers will have to start offering seller financing to prospective buyers if they want to sell those condos. I’m pretty sure if the builders/developers were forced to hold the mortgages they issue for 30 years, they would do a thorough job of screening applicants before they extend credit.

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