CanFL - Community Advocacy Network

Home

Print Page

Printable Brochure

Disclaimer

Contacts

CAN ALERT: FannieMae Makes Life Tougher for Florida's Condo Owners

Dear  Florida's condominium owners are being singled out by Fannie Mae for some tough new lending requirements. Many industry experts believe these new requirements which became effective on January 15, 2009, will make it even tougher to sell condominium units in communities that are already struggling financially. Fannie Mae does not make home loans directly to consumers but instead works with mortgage lenders and brokers to ensure that those entities have the funds needed to lend to home buyers at affordable rates. Fannie Mae-backed loans typically have the best rates and lowest down payments for borrowers. Thus, Fannie Mae policies have a tremendous impact on the lending industry. Fannie Mae's new conditions which apply only to the State of Florida include: 1. No more than 15% of condominium unit owners can be 30 or more days delinquent; 2. For new condominiums and condominium conversions, at least 70% of the units must have been sold or under contract. (Previously the requirement was only 49%); 3. Fannie Mae will now have in-house underwriting teams extensively review a condominium's building, its finances and local market conditions. This review will be at the lender's expense which will make such loans less attractive. (Previously, Fannie relied on lenders to perform these reviews and the lenders controlled the costs); and 4. Higher equity will be required up front from non-occupant investor owners (15% down) and those purchasing a Florida condominium unit as a second home (10% down). For the near future, this additional tightening of available credit will surely impact those struggling to sell their condominium units in Florida. On a separate note, there have already been a number of bills filed for the upcoming Legislative Session which begins March 3 and is scheduled to end on May 1,2009 that will impact all types of common interest ownership communities. The following is a brief list of those bills. Please make sure to check CAN's Legislative Tracking List throughout the Session by clicking on the Latest Issues and Legislation tab on the CAN website at www.canfl.com. HB 27: HOA Mediation and fining for HOA liens HB 61: Timeshare Resort Taxation SB 454: Public Notification Regarding Pending Foreclosures: affects condominiums, cooperatives, timeshares and HOA's. SB 714: Condominium Insurance HB 119: Abandoned Properties: affects condominiums, cooperatives, timeshares and HOA's. SB 880: Condominium Insurance and Condominium Issues SB 730: Abolition of the Department of Community Affairs SB 912: Affordable Housing for Seniors SB 244 exempting 2-story condominium buildings from certain life safety requirements has been withdrawn at this writing, possibly to be refiled at a later date. CAN's bill (sponsored by Senator Ring and Representative Porth) holding lenders more responsible for past due assessments and cleaning up some long-standing condominium and HOA concerns has not yet emerged from bill drafting. Some of these bills have overlapping provisions and others have conflicting provisions at present. Some will remove force placing of individual insurance policies and others preserve that right. We will be discussing all of these bills in greater detail and several more as they come out of bill drafting once they all start making their way through the committee process once Session starts. The full text of all of these bills can be found on the CAN website at www.canfl.com under the Latest Issues and Legislation tab. Please make sure to start becoming familiar with these bills so your community can take a stand in their passage or defeat. As always, if you have any questions or concerns, please don't hesitate to contact me. Best Regards, Donna D. Berger, Esq. Executive Director of the Community Advocacy Network (CAN) Telephone: 954.315.0372 Facsimile: 954.315.0373 Web: www.canfl.com Email: dberger@canfl.com

For more information, please contact Donna Berger at (954) 315-0372 or via email at dberger@canfl.com