Fannie Mae Financing Help

For South Florida Condos

It’s old news that financing for condos in South Florida has become difficult to impossible to obtain. Florida’s condo market has been hit especially hard, as speculators drove the supply and prices through the roof until 2006. Unfortunately, many of these investors either didn’t close on their pre-construction contracts or have turned into short-sales or foreclosures. As a result, many of the condo associations have become financially weakened due to many unit owners not paying the condo fees. This has placed a burden on other unit owners that are paying and many times results in special assessments as well.

The fallout effect has been a spiraling downward trend for condo financing, as many condo associations can’t meet Fannie Mae or Freddie Mac’s lending criteria. The top 5 problem issues challenging South Florida condo financing are:

1. Percentage of units being rented.
   
2. Percentage of unit owners over 30 days delinquent on association fees.
3. Association must have separate Reserve Fund and budget at least 10% of budget for reserves.
4. Condo Association involved in litigation.
5. Condo Associations not having adequate master policy insurance to satisfy lender requirement.

Fannie Mae has sent a “Special Task Force” to investigate the special challenges facing South Florida condos. They are looking at projects that have challenges, but overall have a stable financial situation. Fannie Mae just completed their analysis in February 2010 of Miami-Dade County. They added 70 condos in South Florida to their approved list. The Task Force is now working in Broward and Palm Beach Counties and will release their findings in the near future.

This effort is the first step to improve the health of the South Florida condo market.  The additional availability of condo financing will be a welcomed tool to help the real estate recovery in the South Florida.

For a FREE copy of the Miami-Dade approved list, just email me at HarveyCollier@MortgagePro-Florida.com and use “Miami-Dade” in the ‘subject line’.