2012 Mar 22nd

Some Factors Fannie Mae Thinks are Important When Buying or Selling your Hoboken Condo

Interest Rates for Hoboken Condos are Low – BUT

In order for a buyer to get the best possible rates, the building must conform to certain Fannie Mae imposed guidelines.  So if you are out shopping for a condo, some of the questions you should be asking include:

If any of these conditions exist, it is an issue.  If several of them exist, it may be a real problem.  They are seen as increasing the lender’s risk and therefore Fannie Mae will not buy the loan.  All important questions which a smart buyer will ask up front.  Even if exceptions will be made, the interest rate a buyer will pay is likely to be higher than the going rate as a result.

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  1. Brian

    Back in 2009 I purchased the condo I was renting at the time. This was a 4 unit building with all apartments being rented by the owner. The only way I could go into contract was if we had another buyer to satisfy the 49% rental rule. My mortgage was approved, while the other contract was denied. Now I’m nervous that if the owner doesn’t sell one of the 3 units I’ll be stuck.

    Any advice out there. Should I lawyer up to preempt future difficulties accommodating a buyer?

  2. Lori

    Brian,
    I don’t know what “lawyering up” means or will accomplish. If the requirements are not met, a buyer will pay a higher interest rate. That’s just the way it is. Unless a condo association has a rule on owner occupancy (and none that I know of do – except for coops) it’s a situation over which you have little, if any control.

  3. Brian

    Thanks Lori,

    I felt the Lawyer that helped me close might have some insight on whether or not it was misleading of the seller. Meaning he (the seller) could have used the second contract as bait to get me to buy, when they may have not disclosed problems with the other buyers mortgage.

    Regardless, given the situation I explained above, what are my options/rights to rent out the unit?

    As always your feedback is appreciated.

  4. Andy

    Lori, i had never heard the term “unwarrantable” condo until i started shopping for a place in the french quarter. Most major lenders won’t even touch a condo thats not warrantable thru Fannie/Freddie. I had to look into private financing which meant minimum 20% down no option for PMI and almost 1.5-2% interest rate higher than the conforming loan published rate. I’m actually surprised you don’t hear more of these stories in Hoboken given that everything is a condo. How does it work with new buildings where the developer hasn’t unloaded. Do they typically get hit w/ higher rates as well?

  5. Lori

    New buildings have a “preferred” lender. If you don’t use that lender, you typically will pay a higher rate because it is a new project and the developer still controls the association.

  6. Lori

    Brian – just saw your question. You own it – you can rent it out. That’s easy when it’s a condo. Check on Hoboken rent control laws, though, because they may apply and you may be limited in what you can charge a tenant based on past rents. If you do it the ‘wrong way’ and charge market rate illegally, you can get hit with a huge liability if your tenant sues you.

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