Whether you are an agent in the city, up north near the Wisconsin border, Southwestern suburbs, etc. you all have condominiums as part of your housing inventory. Whether condos are the majority of your business or not, having the knowledge and best practices in place can demonstrate your expertise, instill your value to your client and set you up for success.
New conforming condominium guidelines became solidified in July of 2023 and through our vast experience in this space (it’s 25% of our total business!) we have seen it all. We would like to share with you some best practices that will create a smoother and more transparent experience for your client, ensure the financing will not be impacted and create the ever-important winning difference your clients have come to expect.
1. Know if the project is approved by Fannie Mae or Freddie Mac
Fannie and Freddie now have a real-time database of condos throughout the U.S. that shows if the condo meets their guidelines, if it’s never been reviewed or if it is ineligible. Your Key Mortgage loan officer can access this database and let you know its status. This can dramatically impact the financing process, and possibly even make it ineligible for financing. That’s powerful information for a buyer or seller.
2. Know the major statistics of the association.
Take into account HOA factors like the owner occupancy percentage, the HOA fee delinquency rate (15% or more 60+ delinquent could be an issue) and if they budget at least 10% of their association dues into the reserve account. These all can affect the type of offers and financing that can accepted.
3. Know if any litigation or structural issues need to be addressed.
These can be deal killers, so understanding what the litigation is for, what stage and what repairs need to be completed can make or break the ability to finance the building.
4. Keep an office-level building/association database.
Imagine how powerful and helpful it would be to collectively gather this information and have it accessible when you are presented with the opportunity to list or show a unit. It saves you time, work and frustration — who wouldn’t want that?
When you work with Key Mortgage, your loan officer has expertise and access to the tools that will help you and your clients know if the condo has known issues that could affect financing. This is just as important to your sellers as your buyers — so who provides the financing does matter. This is just another value-add that you can share with your clients.
Reach out to a Key Mortgage loan officer today to learn more about how you can be prepared to work with condominium buyers and sellers.
