Does freddie mac allow a limited condo review for attached projects
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So you may see things like, “FHA-approved condos for sale,” because it’s a great marketing angle for the ones that do allow it.Īnd many prospective condo buyers probably want to put as little down as possible, which is where the FHA loan and its 3.5% down payment comes in. The FHA recently enacted a tough set of standards for condos, including strict zoning rules and policies where a certain number of units must be owner-occupied, sold before endorsement, and current on HOA payments. You can find out if your condo complex is approved for FHA loans here. This means it might not be an option at all, which could create an even bigger problem if you don’t qualify for a conventional loan.
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Condominiums are a form of shared ownership.25% higher if it’s a condo, and perhaps even more if it’s a high-rise condo. So definitely factor them in when determining affordability.Īdditionally, many mortgage lenders charge a 0.75% mortgage rate pricing adjustment for a condo once the loan-to-value ratio (LTV) exceeds 75 percent.Īnd let’s face it, most home buyers put very little down these days.įor example, Fannie Mae (and Freddie Mac) charges a loan-level price adjustment (LLPA) for condos, as seen in the screenshot above. In some areas, HOA fees can be nearly as expensive as mortgage payments, totaling $500 or more each month. They typically come with higher mortgage rates and costly HOA dues, both of which should be factored into your side-by-side analysis. Sure, a condo might come with a lower price tag, but that’s not the end of the story.
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This will either increase your mortgage rate slightly or bump up your closing costs.If you’re unable to put down 25% on a condo purchase you will likely get hit with a pricing adjustment.There are other costs to consider like HOA dues and more expensive home loan financing.While condos are typically priced lower than single-family homes.Here is a link to the Freddie Mac Bulletin released December 15, 2021. A document with examples of questions will be released by Freddie Mac and will follow. There will be an addendum to the current questionnaire that gathers the info lenders need. They will still allow less than 10% with a reserve study and they are requiring documentation that at least 95% of any special assessments budgeted are actually being collected. Projects in need of critical repairs will be ineligible.įreddie Mac is not changing their stance on reserves. The temporary requirements apply to all mortgages secured by unit sin projects with five or more attached units regardless of the project review type. The guidance goes into effect for lenders and appraisers February 28, 2022.įreddie Mac is expecting the “Seller must determine compliance with the requirements regarding” projects in need of critical repairs and special assessments. Today, Freddie Mac released temporary condominium and cooperative property project requirements related to property eligibility and appraisal requirements for projects in need of critical repairs and projects with special assessments. FREDDIE MAC Joins FANNIE MAE IN RELEASING TEMPORARY CONDOMINIUM AND COOPERATIVE PROJECT REQUIREMENTS