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March 28th, 2013 1:19 PM by David W. Welch
If you are a lender stop reading this right now. Ok, if you are a lender and still reading this, I told you so. About five years ago, Fannie Mae, Freddie Mac and FHA changed the rules for condo financing. These rule changes made it virtually impossible to finance a condominium in Florida, especially Orlando. It is easier to just say that there is no available financing for condominiums. That is why I asked the lenders to stop reading, because they will say that they have financing available. The problem is that there are so many "if's and but's" involved in getting the approval, it is difficult to say for sure that financing is available for any given condo community. Because of such uncertainty, most listing agents and condo owners are wary of financed offers.Since January of 2009 there have been 22,009 condo sales in Orange and Seminole Counties. 20,100 of those sales have been all cash deals making up 91.3% of all the closed condo transactions. With inventory in the two county area down to just over a two month supply, well priced condos are getting multiple cash offers. I had one several months ago that received nine offers within a day of hitting the market. Eight of the offers were cash at or above the asking price. Just this week, a prospect inquired about a condo she found online. I explained to her that condos are cash only. She was upset with me, because she does not have the cash, and thought she could get financing. I also recently received an offer on a condo from an agent insisting her lender could make a loan on the property, because it is a townhome. I had to explain to her that the style may be townhouse, but there is no lot associated with the unit. Therefore, it is a condo, and there is no financing in this complex. Just because it looks like a townhouse (a duck), it may be a condo. Double check the legal description for the word "lot", otherwise you could be wasting your time.You may have noticed that nearly 9% of the condo sales were not cash sales. The majority of those were high end condos that were financed using conventional financing with a minimum of 20% down. These were also purchased as primary or secondary residences, not for investment. There is virtually zero investor financing for condos. There are also units that were purchased from Fannie or HUD that offered special financing, and some that are owner financed as well. Overall, trying to buy a condo in Orlando with financing will be an uphill battle. Be prepared, before you start looking.