Ryan Dosen: Condo Financing Hurdles Abound

Ryan Dosen: Condo Financing Hurdles Abound

by | Nov 6, 2015 | Uncategorized

Condo Financing Hurdles Abound By Ryan Dosen   Buying a condominium unit is probably not as simple as you think. Of course, in the post-recession wake of the real estate and mortgage meltdown of the 2000s, qualifying for a mortgage to buy anything can be quite a challenge. However, most people probably do not know that there are additional hurdles and potential roadblocks to financing and purchasing a condo. We do not have many condominiums in the West Chester, PA area, but there are plenty if you venture out to nearby Philadelphia, Wilmington, or other surrounding areas. Some local townhome projects are actually considered condominiums, and the future may see increased usage of condominiums to help cope with the conflicting needs to preserve our green space and to provide residences for an increasing population. Condo Financing Complications Local mortgage expert Ken Feinman of Approved Mortgage in Doylestown, PA says that buying a condo nowadays can be very challenging if the condo is not already approved by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored entities (“GSEs”) that that buy mortgages from lenders and sell them to investors. The catch is that in order to be purchased, the mortgages have to meet the GSEs’ requirements and be deemed “conforming”. And for condominiums, there are extra requirements for loans to be deemed “conforming”. Feinman says that some of the additional requirements for condos include production of a 90-day homeowners’ association (HOA) budget statement, a master insurance policy for the project, fidelity bond coverage (insuring the association against losses incurred as a result of fraudulent acts), proof of an...