Equity Planner

Heads up folks.  Let me bring some clarity to a very cloudy area.  Namely - “Condos”.

There have been a lot of questions recently about condos and whether they will go the way of manufactured homes or not. BIG rule changes have just come out in the last 60 days that have done their best to make your mortgage professional look like an idiot. Please, don’t give them such a hard time as these rules change so quickly, it’s really difficult to stay on top of these almost daily changes.

That said, here’s the answer to one of the big condo questions. In many ways manufactured homes are easier to finance today than condos. In almost all cases regarding traditional lending, the following new rules apply to Condos. Be aware and be wary of them. With just two exceptions, the following rules must apply to all FHA, Conventional, Portfolio, and USDA loans for Condos whether they are owner occupied, or non-owner occupied.

1.      The development must be approved either by Fannie Mae or HUD

2.      The development must not have more than 15% HOA delinquency

3.      The development must not have more than 49.9% Non-Owner Occupancy.

4.      The development must not have ANY litigation

For those of you in normal areas of Southern California this means that Condos are pretty much not financeable at this time. This is why they are so cheap right now and why, for at least the time being, they are not a good alternative to non-condo Single Family Housing which will likely appreciate much better than condos for as long as these rules stay in effect.

There are two exceptions I’ve found;

First exception is with Fannie Mae Home Path Financing. It appears we only need the development to be Fannie Mae approved and the Condo HOMEPATH approved. All other rules then do not apply. HOMEPATH can be used for owner-occupied or non-owner occupied properties, including condos.

The second exception is for VA loans. Some lenders don’t agree with this, but right now I have one lender that is following the VA guidelines, and none of these rules apply to VA either, but the development must be approved on VA’s website as an approved Condo Development.

Both of these exceptions will likely go away soon.

So there you have it. The market is still strong even with this information. Just don’t waste your time on things you can’t close.

Sincerely,

Steve Gronlund

News and Events – our FREE workshops for Real Estate Agents! Steve’s popular Government Loans workshop is being held at the SRCAR office in Murrieta on April 14th, and at TIGAR in Corona on May 13th. Alternative Purchase Options will be held on June 11, and Building a Lead Generating Machine in July 16th, both at Corona. (TIGAR, the Corona Realtor Board charges $5 for Members and $10 for Non-members – sorry, that’s their charge and none of it goes to us!)

We will also be having these workshops at our Ridge Park conference room in Temecula, so please call us at 951 695-1371 for the dates and times. These are completely free of charge and Steve is not selling anything at any of these workshops (or anywhere else!), so come and enjoy all this great FREE and EXTREMELY USEFUL information! Get up to speed and stay a jump ahead of the competition!

Steve is also co-sponsoring another fantastic Comedy Club event for Realtors at Pechanga Resort and Casino in Temecula, CA next month on April 7th, in conjunction with our good friend Kathy Lansford of Old Republic Home Warranty. (Don’t forget to ask Kathy to perform her rap number for you next time you see her!) Everyone had a ball at the one last month. Steve provided the delicious pizzas for the event, Pechanga provided the comics, and a good time was had by all. Email Virginia at virginia@vintgemortgagegroup.com or call 951 695-1371 for more details on all events, or to RSVP! Hurry, these events are filling up FAST! Don’t miss out! The last Comedy Club in particular was COMPLETELY full – we had to turn many people away.

Timely news and tips coming up in future installments, and also interviews with top Realtors! Stay Tuned!

Steve would also like to tell you about one of his favorite internet shows – Think Big, Work Small. They have a great daily video – check it out!

You can follow Steve and become a friend or fan on these social networking sites. More to come!

This entry was posted on Wednesday, March 17th, 2010 at 3:49 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.