Article: News Grows Even Worse For Condos

If you're thinking of buying a condo (especially one in a large development) in southeast Florida, then it's a good idea to take a look at this article from the Arizona Star, published this Monday.

The newspaper reports that condo developments in which some owners have fallen behind in paying their regular association fees (which are used to maintain and pay for the upkeep of the development or building - for the lift/elevator, gardens and so on) and the residents' associations are in some cases struggling to pay for some maintenance items.

Furthermore, the Federal National Mortgage Association (i.e. Fannie Mae) - one of the two big mortgage lenders in America - will introduce a couple of new lending rules to those looking for a mortgage to purchase a condo which may exacerbate the situation.

Firstly, Fannie Mae will not lend to anyone that wishes to buy in a condo development where 15% or more of owners are behind on their association fees. Secondly, they will also not provide a mortgage for a condo in a development where fewer than 70% of units have been sold.

Although such measures are intended to protect buyers and lenders, some say that they will only make things worse for condo sales, a market which is already struggling from over-supply. Geunine sellers in struggling developments may now find it even more difficult to sell and, likewise, buyers may find it more difficult to purchase in particular condo developments - especially in new, recently completed ones.

On the other hand, if you are able to raise alternative financing - particularly in you're a foreign buyer and can get a loan in your home country - you may be able to take advantage of this situation.

Article: News grows even worse for condos (Arizona Star, 23rd March 2009)