Federal Government Help For South Florida Condominiums

The federal government run mortgage company Fannie Mae, the nation's largest backer of home loans, gave some Florida condos a special designation to make mortgage financing easier to obtain for individual buyers. People will now be able to qualify for loans that might not have been available without government intervention.

Fannie announced in January 2010 it will relax some financing requirements and review hundreds of condominiums across Florida for special designation. Developments that are deemed to be financially stable will receive Fannie Mae's designation that will enable lenders to sell mortgages in these places to Fannie Mae.

The program is important because of problems related to the sharp drop in the south Florida housing market. The onslaught of foreclosures and vacancies caused condo boards to struggle in maintaining the community due to the inability to collect maintenance fees.

The potential cycle of being unable to keep up the property could cause a problem in attracting new buyers, thus causing the community to be in further disrepair and prices would continue to fall. Those that might want to buy may not be able to get a mortgage without Fannie Mae's designation because lenders might be less likely to give a loan in buildings that posed a risk for widespread foreclosures.

The idea is for the Fannie Mae designation to help the south Florida housing market to recover. The thought is that if not for the designation, lenders would be more hesitant to loan in some of these condos. Now people will be able to qualify for loans and buy less expensively when the condo has the Fannie Mae designation. This in turn should attract owners who will pay fees and strengthen the financials of these buldings.

As of May 2010 Fannie May gave 108 Florida condos a special designation. In Palm Beach and Broward counties 10 condos have received the designation as of May 2010. Fannie Mae is reviewing projects and updating the list each week. The designation will help buyers in communities across Florida to obtain a mortgage when they were unable to obtain financing prior to the Fannie Mae program.


If you are looking to buy, sell or rent a home in south Florida, please contact me.

Michael Friedman
Lang Realty
561-989-2100