With the overhaul of lending requirements in recent years, it’s become nearly impossible to obtain financing on a condo in Orlando. The new guidelines outlined by Fannie Mae for 2010 eliminates virtually all condo developments in the area.
Among the impossible requirements are less than 10% delinquency rates, a 51% occupancy rate (I’ve heard from lenders that this is now 90%), and 10% reserves for the association. These requirements sound reasonable at first glance, but when you take into the account what’s going on with short sales and foreclosures it eliminates virtually all condo developments in Orlando.
Especially troubling is the 51% occupancy rate that applies to new developments as well. This means no one can obtain financing on a condo until more than half the units are sold. This makes no sense at all and pretty much tells developers they’re S.O.L. if they’re trying to sell new condos.
In fact, only 6 condos are listed on the Fannie Mae approved condos list and only 1 in SW Orlando. For some reason, the only Stonebridge Reserve located in Metrowest is approved by Fannie Mae.
Private owners of condos are more out of luck. Since no one can get financing for their units, they’re pretty much stuck because the buyer will need cash if they wanna buy and I’m sure those buyers will want to pay a whole lot since they’re the only ones able to buy.
I know the government is trying to overhaul the banking system, but this is one area where someone needs to inject some practicality.