I’ve got a lot on my mind, but let’s focus on two things today: a major change affecting condo buyers, and a ballot measure every property owner needs to understand before voting.
Fannie Mae Retires Limited Review for Condos
As if SIRS (the Structural Integrity Reserve Study born out of the 2021 Champlain Towers collapse) wasn’t enough, here’s another shift for condo buyers. Eric Intihar (Fairway Independent Mortgage) one of my trusted lenders, just reminded me: effective August 3rd, the Federal National Mortgage Association (Fannie Mae) is eliminating Limited Review for condo financing. Every condo must now show satisfactory reserves to qualify for conforming financing.
What does that mean for you as a buyer? Let’s define the terms.
Fannie Mae was founded by Congress in 1938 to expand affordable housing financing. Satisfactory reserves mean the HOA has budgeted enough for major future repairs, such as a roof or elevator, without needing a special assessment. Moderate risk means the HOA may need to adjust its future planning. Anything below 30% funded is considered high risk, meaning a special assessment is likely.
Conforming financing refers to loans that meet Fannie Mae and Freddie Mac (The Federal Home Loan Mortgage Corporation) guidelines on credit score and loan size, and it typically carries lower interest rates. Starting August 2nd, buyers whose condo doesn’t meet these guidelines will be pushed into nonconforming loans.
Bottom line: lenders will now require a Full Review of every condo and HOA’s financials. Every condo must now show satisfactory budgeted reserves to qualify for conforming financing. If you’re buying a condo and not paying cash, talk to your lender first. Don’t have one? I have five on my preferred list I’m happy to share.
The Homestead Exemption Ballot Measure
This one is my personal opinion and it’s a pet peeve. Florida’s proposed homestead exemption would rise from $50,000 to $150,000 in 2027, and to $250,000 in 2028, but only on the non-school portion of your tax bill. Sounds great, right? Not so fast.
If you don’t fully understand what you’re voting for, vote no. Don’t support this legislation until you know exactly how it affects your community. My take: This looks like a step toward privatizing services your property taxes currently fund. Are our taxes too high? Absolutely. But gutting the tax base isn’t the fix. There has to be a better way. More on that in my next article.
I am Robbie Bell, your urban lifestyle real estate advisor. I’m certified in multiple areas and here to help you, your family, and friends across the U.S. and around the globe. Reach me at 305-528-8557 or robbie@robbiebell.com.
