CONDO CHALLENGES AND SOLUTIONS
In my conversation with the real estate agents, I heard that houses sell, but condo market is slow. Many reasons are cited – high interest rates, high HOA dues and, as a result, difficulty to qualify. While you can buy a low-priced house with as little as 3.5% or 5% down payment, for condos it is 20% or even 25%. For example, today interest rate for 80% LTV is 7.5%, but for 75%LTV – 7.125%. There is a number of types of financing options available for the purchase or refinance of condominiums, which depends on if it is warrantable or non-warrantable.
In the recent past, it was relatively easy to assume to which category a condo project belongs. However, recently Fannie and Freddie created the “unavailable” list. If a condo is on this list, it automatically becomes unwarrantable and thus requires unconventional financing terms. The status can be changed, but this requires time and dealing with a specific lender who can sell loans to Fannie and Freddie.
We found out about this from the presentation delivered in our office by JD Meadows of Ameris Bank. Please follow this link and watch a 10-minute video to the end if you want to get a bigger picture.
If you have a listing or are planning to buy a condominium, feel free to call me at (415) 225-7920 or send me an email at [email protected].
I promise to help.
Manny Kagan,
President,
Pacific Bay Financial Corporation
NMLS #205637
DRE #00824602