When purchasing property in California and across the United States, getting a mortgage might seem like a difficult task with many obstacles. Lenders will have a litany of concerns that must be addressed before moving forward with a loan. One of the major factors that is now drawing increased scrutiny for those who want to purchase a condominium is its structural integrity and whether necessary repairs have been completed. Freddie Mac and Fannie Mae – the federal mortgage buying programs – has changed its template to address this issue. This should be weighed by buyers and sellers as it could have ramifications that delay or outright end their attempts to complete a deal.
Florida condominium collapse sparks new questionnaire about structural integrity
The deadly condominium collapse in June 2021 was the catalyst to the federal mortgage entities stating they would no longer purchase loans that were linked to buildings that had safety problems or were found to have deferred maintenance. Toward that end, lenders are being given optional questionnaires as to the state of the building. A challenge that has been mentioned is that those who are completing the questionnaires are uncertain as to how to respond to some of the questions as they are not relevant to the buildings they are buying or selling. Some are too detailed for people who are not experienced in the in-depth questions being asked.
The loan approval process has been stagnating because of it. This is causing a chain reaction for lenders, sellers and buyers. Financing is a key cog in the entire process and if Fannie Mae and Freddie Mac are making it harder for loans to go through, it is creating a bottleneck. The safety factor does have relevance. The objective is to ensure that properties are safe for its residents. As with many new rules, this is still be analyzed and changes might be made. Anecdotal evidence has shown that people who were trying to purchase or refinance faced delays because of the questionnaire.
When purchasing real estate, new rules should be understood
People who are buying or selling real estate will inevitably be fearful and concerned about various aspects of the deal. Securing financing is an underpinning of any large purchase and if there are new requirements or requests about how mortgages are granted and protected, it can be problematic. Real estate transactions can be complex. Having advice from those experienced in these situations may be crucial to reaching a positive result even if there are new and confusing rules that must be navigated.