Fannie Mae just released new guidelines, making it more difficult for potential buyers in declining areas to take out a mortgage on a condo.

RTT News reports:

“Fannie Mae has halted mortgage guarantees in condo buildings where fewer than 70% of the units have been sold compared to the earlier 51% benchmark. Additionally, loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity will be more harder to come by for developers and aspiring condo owners, WSJ said. “

What this means is that Fannie Mae won’t buy a lot of condo mortgages where developers are struggling to sell the units. Lenders can still choose to make the loan, but because the mortgage won’t be guaranteed by Fannie Mae, borrowers are likely to have a hard time finding a willing bank and getting competitive rates.

See Also:

Non-Conforming Bank Loans

FHA Mortgages

Tags | condo loans, creative financing, fannie mae