Fannie Mae just tightened up their lending rules regarding condos. This is going to have a large effect on the price of condos here in Santa Maria. Fannie Mae's business consists of buying and pooling conforming loans. Conforming loans must meet criteria established by Fannie Mae, including restrictions on the size of the loan and qualifications of the borrower. When buying these loans, Fannie Mae assumes the risk of defaulting borrowers and changing interest rates. This decision by Fannie Mae will more than likely cause another decline in condo prices and an increase in association fees (HOA's).
The new rule says that if more than 15% of an association's units are delinquent or late in their payments over one month, Fannie Mae is not guaranteeing the loan. This means that the banks cannot provide the loans, unless they intend to hold on to it. Banks do not typically hold on to loans. Therefore, if they are not going to give loans to people who are interested in buying a condo, then the only people who will be able to acquire these condos are "Cash Buyers" because no one else can get a loan. Even if they qualify for a loan, the interest rate will be much higher. So even if the prices of condos come down, they will essentially be paying much more. This means that more investors will be looking to buy condos in Santa Maria.
This is going to have a dramatic effect in the real estate industry in the Santa Maria area. It is a reality that there already exist condo communities that have more than 15% of the units that are currently delinquent in their mortgage. They are not going to meet the Fannie Mae requirements. It will be too difficult. This is going to have a continuing negative effect on the Santa Maria housing market.
So, "have we hit rock bottom yet"? This is a certain indicator that we have not. Prices are going to continue to drop. There are people wanting to buy, but they do not qualify for a loan. This is great for cash buyers who are interested in an investment. It's just another hurdle for the average person trying to realize their dream.
I hope that this informatio was helpful if you have any questions please let me know so that way I can provide useful and helpful information.
Buying or selling a home or property in Santa Maria CA, or a Santa Maria foreclosure, or a property on the Central Coast, my goal is to provide you with resources you need. DRE 0131588
You can feel confident that he will treat you with respect and dignity and that he is only down the street, a local phone call away not an "800" number if you need help, and have any questions. His office is located in the OSH shopping center on 1954 S. Broadway, ste. L, Santa Maria, Ca. or you can call him at 805-352-1100 or email him at GenePerez@GMSLoans.net
It is next to impossible to get a loan for a condo right now in many places. I think their request is reasonable, but should have been in place years ago.