On December 28, 2011 Fannie Mae released Servicing Guide Announcement SVC-2011-23.  This document describes policy changes for condominium insurance requirements regarding master and blanket insurance policies, HO-6 insurance policy coverage, and HO-6 insurance requirements and elimination of ‘walls-in’ insurance coverage terminology.  These changes will be effective for mortgage loans with application dates on or after January 1, 2012.

Download the official Fannie Mae Servicing Guide Announcement.

Fannie Mae, FHA Approval More Important Than Ever For Condos

Watch the news story here.

Or, you can read the transcript below:

Experts say seeking Fannie Mae and FHA approval is vital in today’s real estate economy. NY1’s Jill Urban filed the following report.

Getting a mortgage is harder than ever, but many don’t realize how often it’s unqualified buildings, not buyers, that are killing deals. Condominiums that don’t have their financial ducks in a row are finally getting the picture and are realizing that they need to seek Fannie Mae and FHA approval in order to survive in this real estate jungle.

“Buildings are finally figuring out that in order for people to be able to buy units and get financing within them that they actually have to be compliant with guidelines that were issued by FHA and Fannie Mae. There is a mad rush for this right now. Everyone wants to get the projects approved,” says Orest Tomaselli, CEO of National Condo Advisors.

Tomaselli’s company helps buildings get through the approval process, and nowadays he is inundated. He says in today’s tough market, these approvals are critical because they make sure qualified buyers can get financing, and FHA approval even more so: it makes lending accessible to those who wouldn’t quality for a Fannie-backed loan and gives owners looking to refinance a new option.

“FHA is so important to have in existing condominiums right now because homeowners need to refinance. Sometimes credit score requirements are not high enough for Fannie Mae transactions and it’s important to make sure the building has good financial standing so homeowners can actually pay their maintenance,” says Tomaselli.

Tomaselli says seeking approval often involves adjusting reserve funds changing bylaws or resolving litigation. It can be quite a process.

It’s worth noting that it’s not the same for co-ps. While they must be compliant with Fannie Mae, they undergo a different process and don’t qualify FHA lending.

Joseph Taube of Taube Management Realty manages several existing condominiums and has been working to get many of them quickly approved.

“If you don’t have this, you’re really not in the game. If you are not Fannie Mae or FHA-approved, you will suffer because you really want to make people come to your property to buy,” says Taube, “and if you’re not going to do this, they will go to another building and you’ll be out.”

These approvals instantly boost property values because owning a home in a building that banks are willing to lend in is the one luxury many can’t live without.

Happy Holidays!

An insightful look back at the past year of FHA and Fannie Mae condominium regulations, including trends for the future and industry predictions.

Download the full presentation here.

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Great news (at last)! The National Association of Home Builder (NAHB) reports that compared to last October:

• 56,000 more condos sold this year;
• 136,000 less condos in inventory than last year; and
• the number of months supply has come down by 3.9 months .

Keep in mind that there is still more than 9 months inventory on the market and more buyers in the market.  In order to stabilize pricing for your community association, a plan is required immediately to engage the most qualified buyers.

A wise man once said that fewer buyers means lower prices. A wiser man said, if your buyer cannot get a loan, it really doesn’t matter, does it?

The wiser man must have read HUD’s research, where he learned that as of June 2010, 38% of single-family home loans were FHA insured loans.  And in an even more recent HUD communiqué dated November 21, 2011, HUD reported that the FHA “. . . insured 770,000 new purchase loans and more than 585,000 of them were for families who became homeowners for the first time. This represents 56 percent of all first-time buyers in the nation.”

THE NEED FOR LOANS

There is a great deal of debate regarding whether to have a FHA and/or a Fannie Mae project approval.  At the end of the day, it can be reduced to a simple decision.

If you are selling cars, your audience is drivers. If you are marketing condos, your audience is buyers. Both need loans.

You can no longer believe that getting a loan is the buyer’s problem. Without competitive lending, the equity of your condominium is at great risk. First time cash and portfolio loan buyers are today a statistical minority. According to these statistics, FHA buyers obviously have the credit and are ready, willing and able to commit. . . especially at today’s prices.   But how do you determine whether your condominium is eligible for FHA project approval?

FHA CONDO COMPLIANCE

New FHA project approval guidelines recently went into effect that establish today’s project approval eligibility criteria. National Condo Advisors’ unique compliance review will provide you with a detailed list of any compliance issues together with recommendations for corrective measures. This is the most critical part of the process.

Corrective measures may or may bring with them short and/or long-term costs. To make a more fully informed decision, you will need to have all of your options made available.  We offer this level of depth and expertise in every project we consult on. Our goal is to help your condominium achieve compliance and project approval eligibility at the lowest total cost and in a manner that best reflects your specific need for the availability of FHA loan products as well as your marketing goals, culture, budget and future plans.

THE TIME IS NOW

The condominium world has long awaited more sales, less inventory, and fewer month’s supply. In many local markets we still have a way to go. Nonetheless, the only way you are going to benefit from an improving market is through lending availability. And if you are in a challenging market, the need to make lending more available for your condominium is that much greater. Even the car dealer we mentioned above knows that he has to make financing available or people will go elsewhere.

The first step is to find out if your condominium is or is not eligible. Fill out a free eligibility review or contact National Condo Advisors today.  There is no time to waste.

Shane Shapiro
National Director, National Condo Advisors, LLC

Shane Shapiro works with property management firms to  differentiate their value proposition by better addressing  project approval and its relationship to the availability of competitive lending. He supports homeowner association representation attorneys with technical resources in the areas of project approval and related engineering disciplines in support of new construction, conversion and existing condominiums.  Connect with Shane on LinkedIn.

Congress just raised maximum loan limits for the Federal Housing Administration while leaving loan ceilings untouched for Fannie Mae and Freddie Mac.

Check out this article by Kenneth Harney, a columnist for The Washington Post Writers Group.

Now more than ever, your development will benefit from being FHA approved.  Fill out a free eligibility review here.

Already have a certification?  Stay compliant and stay certified!  Fill out our FHA recertification form here.

Interested in learning about alternative financing for your condominium development?   In this presentation, CEO Orest Tomselli details the what, why and hows of non-warrantable financing for condominiums.  Learn about products and services from various lenders and what’s right for your development.

Download the full presentation here.

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A huge thank you to the organizers and participants at yesterday’s Chicagoland Condo, HOA & Co-op Expo Presentation.  As promised, below is the presentation given by CEO Orest Tomaselli at yesterday’s conference.  We welcome all comments and questions- please contact National Condo Advisors!

If you’re interested in Reserve Studies, check out our sister company Strategic Inspections’ free Reserve Study review for condominiums.

Download the full presentation here.

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