November 8, 2022

When the Champlain South Tower in Surfside Florida condo project collapsed in June of 2021, Fannie Mae and Freddie Mac decided to tighten their belt regarding condominiums and made some significant changes now seeing take effect in our marketplace. The concern is aging infrastructure and significant deferred maintenance across the nation. I know we are seeing more properties getting tied up with Condo issues, and I hear from people almost daily about specific projects. I don’t feel like writing for weeks, but if you google search LL-2021-14, you will find the three-page letter written by Fannie Mae. For those of you who don’t have the day to spend reading what Fannie wrote, below are a few of the key issues:

• Significant deferred maintenance - Anything that affects safety, soundness, structural integrity…
• Special Assessments – They will look into the reason for the special assessments and make sure the property is financially stable.
• When Fannie becomes aware that a project doesn’t meet the guidelines, they will put the project in unavailable status and not lend in there until the issues are rectified.
• They went hard on the Reserve requirement of 10% with no leniency.

When you run into a property that is unacceptable to Fannie and Freddie, you have to go with what we call a non-warrantable condo. We can do those loans with a minimum 10% down payment and close in about 30 days.

Rates are a little bouncy to the low side today. We are at our best levels in a week and slightly higher than our 30-day best. YAY! Rates are still not great, but they will improve someday!

• 30-year Government Loans (FHA / VA) is in the 6’s.
• Conventional Loans up to $715,000.00 - 6’s and 7’s
• High Balance Loans $715,001.00-$ 1,072,500.00 are in the 6’s and 7’s
• Jumbo loans above $1,072,500 are in the 6’s and 7’s
• 5/1, 7/1, 10/1 Arms are in the 5’s and 6’s
• Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
• Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 7’s - low 8’s.
• 0 down loans are in the high 7’s to low 8’s- 620 credit score min right now! Mid 6’s, for the most part, up to $735,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 7.49% with limited fees – But they get you where you need to go!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I will be around all weekend if you have any questions or if someone interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 xt. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!