Saturday, January 9, 2010

Florida Real Estate Market – Condo Updates

Fannie Mae Relaxes Florida Condo Standards

There was considerable movement for certain sectors of the real estate market in 2009. Thanks to the 2009 Home Buyer Tax Credit, many first-time homebuyers were able to purchase properties and enter the arena of homeownership. Additionally, international, national and local investors were able to take advantage of record low prices that were caused by the foreclosure crisis. Condo sales were one segment of the real estate market that was largely left out due to difficulties with obtaining financing. Due to strict mortgage standards, condos were available primarily to only those who were cash buyers.

According to the Palm Beach Post Money article, “Fannie Mae is seeking to prop up Florida’s ravaged real estate market by reviewing hundreds of condo projects in the state that don’t qualify for its loans. The mortgage finance company said Thursday that buildings deemed stable after the review will be given a special approval lasting up to 18 months. If they are approved, lenders will be allowed to offer mortgages to homebuyers and sell those loans to Fannie Mae, which pools them into bonds and sells them to investors.” Karen Pallotta, executive vice president of the company’s single family mortgage business stated that the initiative “is geared toward providing maximum support for Florida’s distressed condo market.”

The article continues saying, “Under nationwide regulations enacted in March, Fannie Mae has been rejecting any mortgage for a condo buyer if more than 15 percent of a development’s other owners are delinquent on their association fees. Fannie Mae has been willing to make exceptions to that rule, but now it is actively seeking out applications for exceptions.” This easing of financing restrictions will create opportunities for those who wish to purchase a condo to do so. Many people seeking the maintenance-free, amenity-rich lifestyle will be able to secure the financing they need, setting the stage for a boon to condo sales in Florida in 2010.