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January 11th, 2010 9:11 AM by David W. Welch
Well, that might be a bit of an exaggeration. Fannie has announced that it will make an effort to help the sagging condo market in Florida. This program is only in Florida, and so far has only been directed at South Florida. Specifically, the Miami area is where all the focus seems to be right now. For more complete details read Mary Shanklin's article in the Orlando Sentinel. It was nearly a year ago that Fannie, Freddie and FHA essentially created the condo mess here in Florida by making financing virtually impossible. In an already difficult market, the tight restrictions on financing caused condo prices to plummet. Literally, overnight I saw condo values drop by tens of thousands of dollars and sales contracts fell apart en masse.
The assistance that Fannie is offering now is a special approval process that will be handled by special teams going around the state reviewing existing condominiums. They have dedicated six people to this project (read with a sarcastic tone). With the special approval, condos will be able to qualify for Fannie Mae financing. Because of changes last year many condominiums do not qualify for Fannie Mae financing, making it more difficult to obtain a mortgage. There is virtually no financing available for purchasing condos in Florida as an investment. Even purchasing a condo as a second home can require a higher down payment, higher interest rate and shorter term. Many times only 15 year financing is available and frequently ARM (adjustable rate mortgages) are the only options for condos financed as a second home according to Jeffrey Sachs with FBC Mortgage.
To see if your condo is Fannie approved check their website eFannieMae.com. Go to Frequently Searched Pages and click on Condo, Co-op, PUD Eligibility. The special approval area will be updated as complexes are reviewed and added. I am sure with six quasi-government employees on the job, the whole state will be reviewed in no time (sarcasm again). I apologize in advance for the sarcastic tone. After all, I am the Real Estate Optimist.
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