More Changes to the Condo Process

More Changes to the Condo Process
More Changes to the Condo Process

Hi, this is Tom Heath with the Mortgage Guidance Group at Nova Home Loans. And this is our weekly installment of mortgage and real estate related matters. This week’s topic is the condo process. We have always had a little bit additional steps when it comes to financing a condo. In addition to qualifying the borrower through their loan application and the collateral through the appraisal, we’ve had to verify the stability of the HOA through a variety of research and forms. Each loan program has a separate definition of what qualifies as acceptable for the HOA. Today we’re specifically talking about Fannie Mae and Freddie Mac, that have been the most lenient over the years in regards to qualifying condominiums for approval. They recently came out with some changes that require us to dig a little bit more deeply into the HOA and the stability of the condo, not just the financial stability of the HOA, but the physical stability of the condo.

So recently the guidance came out that there’s a new set of forms for us to fill out in addition to what we’ve been using in the past. And those new forms really focus on the quality of construction. It looks for deferred maintenance to make sure that the contractors that were used were licensed, and there’s a series of questions. We also have to run the association of the condo project through Fannie Mae’s system to make sure that they haven’t shown up on any of their unavailable lists, meaning they’ve had issues with them in the past. So this is just one more step that your lender is going to be going through to make sure that your buyer of a condominium is going to be qualified. Now, this is in addition to the HOA questionnaire that we’ve been filling out. So it doesn’t replace it, it’s just in addition.

If you have any questions on this, don’t hesitate to reach out to us by email, or head over to our website? MGGroupTucson for more information. And as always, if there’s a topic you’d like us to cover , just let us know. Have a great day.

Tom Heath
VP / Senior Loan Officer
Mortgage Guidance Group of NOVA® Home Loans
6893 N Oracle Rd #121
Tucson AZ 85704