Today I spoke with a colleagues in Colorado and Texas who said that a Washington Mutual representative had told them that they were now requiring no more than 25% non-owner-occupied condo units in a building, a change from 50% (a huge change). Have you heard that?
I know that the lenders are also considering how many condo units are behind in paying their monthly condo association payments. Do you know what percentage becomes a problem? It's a serious concern since the ongoing obligations must be paid by the remaining paying condo owners, whether through an assessment or increased fees.
With so many condos on the market, the increasing difficulty of financing these condos - while logical - magnifies the problem.
Sharon- Oooohhh, if this is true- that will be devestating to many of our condo projects here in South Florida!
Sharon - I remember not too long ago when the requirement was more stringent than is has been - just a few years. It also seems to depend on whether it is a primary or secondary home, at least with some lenders.
The bigger issue we are seeing in mnay condo complexes is the number of short sales, foreclosures and REOs. PRoperties are not maintained, HOA fees are not paid so the reserves go down and some places are now increasing the HOA fees to compensate. Just went thru an REO at a large complex and the property manager indicated they are having HUGE problems as a result of all the distress sales. Not a pretty picture. And then, of course, there are the declining values.
Jeff
Katerina - yes, that's the last thing we need for condo recovery!
Jeff - I think that's the point with the new requirements. If there are overdue fees, it's more of a burden on the remainder.
Hi Sharon,
Interesting info, I haven't heard this myself. Yet I'm not totally surprised, it's obvious a lot of associations are in trouble.
Sharon I had not heard that. It would seem silly to amke it even harder for home ownership at a time when sales are what will keep things together.
Lynda - it seems like a lot of the changes are things that the lenders should have considered the first time around.
Bill - perhaps they're only using these new criteria in "declining markets" - but that's where your comment most applies.