Making qualifying for a condo loan more difficult

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Vast changes on loans requirements for condo developments have added to home ownership difficults.

Earlier this year FannieMae put out new guidelines for condos.  One such was requiring in many cases new insurance called “walls-in” coverage policy (HO-6 policy).   Part of HO-6 coverage is the replacement of items such as cabinetry, carpets, improvements to the home beyond the structural items covered by the HOA.  The coverage must be at 20% of the appraised value of the condo.  

I have this insurance on a condo in Florida and it runs about $750/yr.  So that is not small change.  If the cost in California runs $35/mo as a local mortgage broker stated that will impact the buyer purchasing power.

If you are looking at buying a condo these new condo lending changes must be known by your Realtor and Mortgage broker or you can hit speed bumps.

For more on the FannieMae guidlines click here

 

 

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