Fannie Mae has tightened credit for buyers of condominiums. The new rules are going to hit new construction condo buildings especially hard.
Effective as of March 1:
- Has stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have sold (previously it was guaranteeing the loans as long as at least 51% had sold)
- Won’t back loans for sales in buildings where 15% of current owners are deliniquent on HOA fees
- Won’t back loans where more than 10% of units in the building are owned by a single entity
Freddie Mac has apparently not tightened its lending standards- yet.
Both Freddie and Fannie, however, are going to increase fees.
Starting in April, buyers without at least a 25% down payment will have to pay closing-cost fees equal to 0.75% of their loan even if the buyer has an outstanding credit score.