Condos with Delivery Restrictions or Critical Repairs

I hope you had a great weekend and that life is treating you well. I wanted to start with a little Real Estate humor as I was putting the finishing touches on a house that I am about to start renting in Palm Springs (let me know if you are interested in a weekly rental), and the very last screw I was putting in on the very last curtain sprung a leak on the main water pipe. I knew where the shutoff was, and everything was OK, but it was interesting to see water fly across the house after we finally got it 99.9% done! Sometimes houses can be a nightmare, but more importantly, we must take our bumps and bruises in life, no matter what we do, and get back up and fight to the end if we want to win.

We want to make you aware of an important trend we are now seeing in the condo lending space. I never get too excited or too upset. I go with the flow and keep grinding, and good things will happen. Hey, the market is picking up, so we should all start working a little harder!

Enough about me, now to the news! In the past week alone, we have encountered two established condo projects flagged by Fannie Mae with "Delivery Restrictions - Critical Repairs", specifically tied to balcony and exterior structural concerns. These are not isolated cases, and we do not believe they will be standalone occurrences.

Here is what this means for you and your buyers:
When a condo project is flagged for critical repairs, particularly involving balconies or exterior elevated elements, it immediately changes how lenders must approach the transaction.
These projects are no longer eligible for streamlined or limited condo review. Instead, every loan must now go through a full project review, and in some cases, may be deemed non-warrantable depending on the status of the repairs.

What we now must verify as lenders:

• Whether the balcony/structural repairs have been fully completed
• Engineer reports and structural certifications
• Proof of completed work (paid invoices, contractor completion letters)
• Updated HOA financials and reserve studies
• Special assessment details and funding status
• Insurance compliance and budget adequacy

If repairs are ongoing, partially complete, unfunded, or lack proper documentation, conventional financing may be significantly limited or unavailable.
Important: This is not a "some units are OK, others are not" situation. When Fannie flags critical repairs, they are treated as project-level risks, not unit-level issues.
What this means for listings and escrow timelines:

• Expect additional documentation requirements
• Anticipate longer underwriting review periods
• Confirm repair status early - ideally before accepting an offer
• Prepare buyers for the possibility of alternative financing if needed

We strongly recommend that listing agents and HOA management companies proactively gather documentation related to any structural or balcony work before properties hit the market.
The condo landscape has changed significantly in the wake of Surfside, and structural integrity is under heightened scrutiny nationwide. We expect to see more projects reviewed this way moving forward.
If you have a condo listing and want us to pre-screen the project before you go live, we’re happy to help. Early review can prevent surprises mid-escrow.
Yes, these are all leaning non-warrantable, but we will look at them and see if we can get them into a warrantable loan, and each property will be case by case!
As always, our goal is to protect your transactions and keep deals moving smoothly.
If you have questions about a specific project, feel free to reach out anytime.

Please let me know if you have any questions or if you or any of your clients, friends, or family members need my guidance. I’m just a call, text, or email away.
📞 Direct Line: 661-291-2222 – Text OK
📞 Cell: 661-714-6258 – Text OK
📞 Office: 661-260-2970 ext. 2222 – Text OK
📧 Email: Mike@AugustaFinancial.com
But wait, there’s more…

Interest Rates
Interest rates reached their highest levels in 3 years yesterday, and they have moved up a bit more today. As always, Interest rates are day to day, but I don’t expect them to go down quickly. We should see 30-year rates in the 4’s sometime in 2027 or 2028 if things go well! Call it a slow burn with a lot of little hiccups on the way there?

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers, including conventional, FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the 5s.
• Conventional loans up to $832,750 are in the mid to high 5’s.
• High-balance loans from $832,751 to $1,249,125 are also in the high 5 and 6s.
• Jumbo loans above $1,249,125 are in the high 5’s and 6’s.
• ARMS in the 5’s and some in the 6’s
• Bank statement loans are available again with 10% down, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,325,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No-Ratio Loans require a 30% down payment.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   
Nada today!

**Bad News for Condos***     
Diamond Head: We have some concerns over there. Per Fannie Mae, certain parts of the complex are approved, while other parts have outstanding critical repairs.
Buenaventura Gardens: Restriction 22 – Portions of the project have outstanding critical repairs. Lender to review the CPM comments for more details.

CONDO HELP!!!
If you have a listing or a buyer interested in a specific condo and are unsure whether it is warrantable or Non-warrantable, please call me, and we can look up Fannie’s list in real-time. We don’t know when something has changed, and it would be impossible to track everything day by day, but we don’t mind looking up a few items each day.

The full state of California’s naughty list has been added to:
MikeMeena.com! See the link below:
https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.
📞 Direct Line: 661-291-2222 – Text OK
📞 Cell: 661-714-6258 – Text OK
📞 Office: 661-260-2970 ext. 2222 – Text OK
📧 Email: Mike@AugustaFinancial.com

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!