Sunday, October 14, 2012

New Fannie Mae rules make it tougher to qualify for mortgage - Chicago Tribune

Andrew  J. Wilson, Fannie Mae's 

director of media and external relations, explained some of the changes:
Q: What's happening for condo buyers?
A: We're bringing out a new version of our automated underwriting system, called Desktop Underwriter. These rules apply to lenders who use that system to qualify borrowers for loans under Fannie Mae guidelines. Currently, if you're buying a condo with less than 10 percent down, you'll have to fill out a questionnaire about the homeowners association's financials and provide information about its reserves. In the new rules, you'll have to do this if you're putting less than 20 percent down.
Q: What's Fannie Mae looking for from the homeowners association (HOA)?
A: It's asking these things to have greater confidence in the stability of the homeowners association. The lender would be expected to review the (HOA's) budget, including individual line items, income and expenses. This full review is to determine whether or not replacement reserves and can be funded and if insurance deductiblesinsurance deductibles are funded. (The broader requirement) speaks to making sure the homeowner's association has the ability to maintain and insure the property — and whether or not we would want to be buying the loans.

1 comment:

Anonymous said...

The HOA lobby claims that HOAs need the extreme power they have in order to protect property values.

So if a homeowner in an HOA can't sell his house, should the HOA be held liable?