Freddie Mac Eases Condo Borrowing Restrictions
Florida’s depressed condominium market will benefit from the easing of the agenciy’s mortgage qualification standards.
Palm Coast, FL – April 1, 2010 – Government guaranteed loans have been hard to find for potential condominium buyers. Condominium units in complexes with too many foreclosures, vacancies, or delinquent association dues have not qualified for federally backed loans, even when the buyer has excellent credit. Freddie Mac has announced an easing of lending rules that allows them to back buyer loans as long as the seller’s loan is already owned or securitized by the mortgage finance company.
The reasoning behind the change is that lenders are not taking on additional risk. They are simply shifting the payment burden to a different party. The change is effective April 1st. To qualify, the new loan must close by March 31, 2011.
condo resales
what if the condo being purchased is free and clear and has no mortgage?
Common fees don’t drop in bad market
If everything about owning a condo dropped lower as property values did, then they would be a good buy and not such a complex property. The taxes do drop, but common fees and special assessments bring the cost up to high. The non condo’s become more attractive to condo owners, as do appartments, which offer the same life style, and no risk. Property ownership is not building equity anymore, as it has a direct relationship to the unemployment and government debt. Jobs, and less government would solve the problem, but we now are closer to social state, where government might as well take over housing and package it with healthcare. Even emploment is now being replaced by joining the military, for young adults, especialy men, as it is guaranteed income and funding for training and education. We have arrived in a new world, due to the awakening of the sleeping monster, China, as it was predicted years ago.
Reply to cw
Since the logic behind the change is that the bank takes on no more risk when they already hold a note, I don’t think the change would effect units that are free and clear.