Archive for December, 2009

Happy Holidays

Happy Holidays

Dec 24th

Posted by Jill in General

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Happy Holidays from

Jill Penman and Family

We hope you enjoy a safe and fun holiday season filled with lots of joy and happiness!

From Jill, Matt, Caden, Chloe & Brooks

Buying a townhouse is like buying a condo for a bank to approve the loan

Dec 4th

Posted by Jill in Uncategorized

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Since a townhouse is a zoned a condo it can be harder to get a loan approved compared to buying a single family home.  Most loans are sold to Fannie Mae or Freddie Mac and they are unreasonable restrictions and rules which seem to be changing by the day.  I see why some mortgage brokers are singing the blues.  So after you the sign and agree on price, review the condo documents, pay for the inspection ($450-$600), pay for the appraisal, wait and wait to see if the appraisal price is the purchase price (or more ya right) then you find out the loan gets denied due to the fact that the rules just changed for property that are condos. See some new rules below.  So most townhouses are in a condo association with 2 or 4 units and share a wall and roof.  If both sides are rented and neither is owned and lived in as a primary or second home they will not approve the loan.  So in other words, if the developer last year rented the units since there were no buyers and the developer is the owner of the deed for the units and none have closed, they will REJECT the loan.  Unbelieveable, it is just getting more difficult. 

B4-2.2-01, Condo Project Eligibility(10/30/2009)

Introduction

This topic contains information on condo project eligibility, including:

Condo Project Eligibility

The quality of mortgages secured by units in a condo project can be influenced by certain characteristics of the project as a whole. As a result, before Fannie Mae will purchase or securitize mortgages secured by individual units in a condominium project, the project must be acceptable. The scope of the guidelines and the specific eligibility criteria are dependent upon whether the condo project reviewed is established or new and are summarized in the following table:

Project Type Eligibility Criteria
Established project
  • at least 90% of the total units in the project have been conveyed to the unit purchasers;
  • the project is 100% complete, including all units and common elements;
  • the project is not subject to additional phasing or annexation; and
  • control of the homeowners’ association has been turned over to the unit owners.
New project
  • fewer than 90% of the total units in the project have been conveyed to the unit purchasers;
  • the project is not fully completed, such as proposed construction, new construction, or the proposed or incomplete conversion of an existing building to a condo;
  • the project is newly converted; or
  • the project is subject to additional phasing or annexation.
Two- to four-unit project Additional eligibility requirements apply for two- to four-unit projects:

  • No single entity (the same individual, investor group, partnership, or corporation) may own more than one unit within the project;
  • All units, common elements, and facilities within the project—including those that are owned by any master association—must be 100% complete;
  • All but one unit in the project must have been conveyed to owner-occupant principal residence or second home purchasers; and
  • The units in the project must be owned in fee simple or leasehold, and the unit owners must be the sole owners of, and have rights to the use of, the project’s facilities, common elements, and limited common elements.
Manufactured home project Additional eligibility requirements apply for manufactured home projects.

All condo projects consisting of manufactured homes must be submitted to Fannie Mae for review and acceptance, with the exception of multi-width manufactured homes that are part of a PUD project.

Condo Project Type Codes

When a lender delivers a mortgage for purchase or securitization, it must provide the project type code. The following project type codes are used for condo projects:

Project Type Code Description
P Limited Review — New detached projects
Q Limited Review — Established projects
R CPM Expedited Review or Lender Full Review — New projects
S CPM Expedited Review or Lender Full Review — Established projects
T Fannie Mae Review — Projects consisting of manufactured housing, or any project with an unexpired Final or Conditional Final Project Acceptance status
U FHA-Approved Project

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement 08-34 December 16, 2008

Call me if you have any inquires or would like real estate assistance to buy or sell at 305-807-9199.