Why Condo Financing Is Being Denied | New Rules 2022

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We’re hearing this story more and more lately…
You’re selling or buying a condominium unit and everything is going smoothly, until the last minute, when the financing is denied unexpectedly. What is the cause of this trend?
You may recall the tragedy in Florida last year when Champlain Towers collapsed due to structural neglect. In response to this and to hopefully keep something similar from happening again, Fannie Mae and Freddy Mac updated their condo guidelines. Condo associations, boards and management companies will now have to attest that there is no significant deferred maintenance on their properties.
Overall, this is an important safety measure. However, it could impact the value of condo properties out there, and the eligibility of borrowers. The smartest thing for condo associations to do will be to get out in front of it as best they can.
#condofinancing #realestate #deferredmaintenance
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Copyright © 2022 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.

Опубликовано:

5 май 2022

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Комментарии : 26

@graywilliams_77. 11 месяцев назад

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@graywilliams_77. 11 месяцев назад

Thank you for providing this helpful pointer.

@mellocello187 8 месяцев назад

Ya, it totally makes sense to come to an unrelated RU-vid and “pose” that totally legitimate question. 🙄

@stephenburnage7687 7 месяцев назад

Not just Florida or the US and not just financed units. I pulled out of several potential (cash) condo purchases in London, UK, as the property management companies were evasive with their answers to such standard questions. "Buyer shall rely on their own enquiries" was a common response to questions about structural or maintenance issues (or even the finances of the condo association). How on earth is a buyer of a single unit evaluate an entire building and/or the finances of the association? In disgust, i bought a small house instead.

@triadradiorepair6929 5 месяцев назад

We were denied a conventional loan on a beach condo in SC because the percentage of rentals in the unit were to high.

@stephenburnage7687 5 месяцев назад

Interesting. In BC, Canada, they just passed a law preventing HOA's from limiting rentals.

@MidRiseLiving 6 месяцев назад

I’m seeing condo complexes even a few years old getting declined for conventional loans and they have nothing to do with deferred maintenance. Here in CA, it’s popular for property management companies to outsource the condo documents and questionaries to a 3rd party like Condocerts or Condowise. Unfortunately, as soon as the new Fannie questionnaire came out, they’ve been answering many questions “too safe” likely to reduce their legal risk. The questionnaire is 10 pages long and if the lender’s condo department doesn’t like the way even one question is answered, they ask more questions which the property management company doesn’t want to answer (due to more legal risk) If you go to board members, they won’t help either due to the same reason.

@Chicago_Clout 7 месяцев назад

Crooked Creek HOA in Sarasota has fallen behind in structural, plumbing, general maintenance. The lack of roof repairs caused major mold issues.

@dc100dc100 8 месяцев назад

I’d demand an independent audit of any condo that has to have a special assessment. Likely the fees have been misspent over the years.

@cmargo10 6 месяцев назад

Not as likely as the Condo board simply deferred big maintenance expenses too placate residents with smaller HOA increases. It’s called kicking the can down. the road.

@allenscreen2143 Год назад

Great video!

@raineyjayy 9 месяцев назад

Our buyers' financing is having an issue with 1 line in the insurance doc that says it won't cover cosmetic only repairs even though anything structure gets convered and the HOA itself explicitly handles the look and presentation of the neighborhood. It's dumb. >

@guedesricsfca 6 месяцев назад

Do you know if an FHA loan would have the same questionnaire. The reason that I am asking is because the conventional was denied in my casa because the condo did not want to sign the questionnaire about safety.

@StilesLaw 5 месяцев назад

Yes, an FHA loan should require a condominium questionnaire about safety as well.

@marisa537 Год назад

Is the new law only affecting condo buildings that are 3 stories and up? You are saying 6 units. What if the building is a 2 story walk-up with 6 or more units? They are still subjected to the new inspection and reserves requirements as the high rise condos?

@dawayeaung2694 6 месяцев назад

I hate living in a condo never thought of buying one Living in the air .I prefer to live in a plot of land with a house and a garden i stead of sharing the elevator especially when with someone disagreeable and so forth. It is always good to be on your own.

@samwalton4598 7 месяцев назад

“It Could affect the value of your property”?? 😂. If you could short the transaction like a stock! You definitely would. I would bet the majority of Condo complexes in Florida have deferred maintenance charges. Condos will become as hard to finance as a Mobile Home! Game set match for condos!!

@fernandomejia5712 Год назад

THank you. I going through this now. Condo assoc refuses to sign form 1076

@goldenparachute392 11 месяцев назад

What city & state are you in? Hope you’re able to get a good resolution

@fernandomejia5712 11 месяцев назад

@@goldenparachute392 is the CIty important ?

@goldenparachute392 11 месяцев назад

@@fernandomejia5712 was curious, that’s all. But I was thinking that maybe the area could matter. Maybe older condos?

@fernandomejia5712 11 месяцев назад

@@goldenparachute392 it’s all condos in Florida. Ever since the collapse of the buildings in Miami

@leonab545 8 месяцев назад

What about financing denied due to developer still owning most of the building, including a commercial lower level unit, which alone gets majority votes in the association.