New Guidelines For Lending On Condominiums

This topic was discussed very lightly in a thread somewhere back on this site, but we thought it deserved front page attention. From “the Banker”:

I have found that there is a tremendous amount of uncertainty and recent questions in reference to all of the Condo Guidelines and Approval Changes that are directly hitting the San Francisco condo market. I will note that these rules are those issued by the Government Sponsored Enterprises, Fannie Mae and Freddie Mac.

There are exceptions to the rules and [my bank] does have certain projects approved, or grandfathered in before all of the changes. Also, because of the relationship [my bank] has with the Agencies, we also have the ability to request for Exceptions. This is a major advantage that [we have]!!!!

Here is a list of some of the new, potential pitfalls:

-New construction financing is being increased from 51% to 70%, again if not grandfathered in or currently approved
-No more than 15% of the projects’ units can be 30 or more days delinquent on HOA dues
-The project cannot have more than 20% commercial space
-Fidelity Insurance is required for Condos with 20 or more Units
-No more than 10% of the project can be owned by one entity
-A HOA must be in control for at least 1 year

Again, these are the guidelines and exceptions can be made.

As always, if you have more questions, feel free to drop us a line (, or make a comment below. If you’d like to get in touch with “the Banker”, that can be arranged as well.

What a shame. . .

I recently inquired with Alex if I could post on theFrontSteps. I have written in the past, actually have a degree in writing, but more than that, I think this site is well thought, well done, and has gathered a nice following. My

name, TheBanker,

says it all. I hope to provide insight, a different twist, and perhaps a bit of truth and reason. Alex has warned me, so, my disclaimer, these are just my opinions, period. Now, on to it. . .enough with the intro.

Now the Shame of it all. . .

Rates are strong. Company earnings this week have forced money out of the stock market and into treasuries causing a drop in the 10 year yield, thus affecting mortgage rates. These days, there is no rhyme or reason in pricing loans, or what we call around here; RISK! So, rates are strong and a slim number of the population can afford to buy(down payments), refinance(income,etc), or eat dinner out. We have been completely stalled by the current state of the market and all the while interest rates are still at fantastic levels and we are running out of time for the Jumbo Conforming Loan changes. . .this is currently $729ish and will be reduced to $625ish.

One last blow. . .E loan is now gone and Downey Savings, one of the negative amortization kings, is also gone. Lastly, Gateway Bank wholesale has also left the building.

My point; rates are good, property is moving at so called “deals,” and we are running out of time!