The concept of the classic Florida condo is an inspired one, peace of mind by design. A condo owner can enjoy the sunshine then “set it and forget it” as their unit is part of a whole that will be cared for in the condo owner’s absence and will receive a level of security that is suitable for homes that go unoccupied for weeks or months at a time.
But, as we all know…condo mortgages have been fraught with, well…disaster. The same elements that make condos a brilliant property ownership solution are the same ones that have made them high risk properties to finance. And that’s because you need to rely on the rest of the condo owners in your subdivision to remain solvent and pay their bills and have faith that the association is prudently and effectively managing everything!
Which brings me to the whole point of this post…while getting a condo mortgage can still be a bit challenging, Fannie Mae has been coming through with full approvals and we have been closing those “sunny 3-bedroom, 2-bath units with brand new kitchens and Gulf views” in 30-40 days.
Here’s the catch…if you’re looking to purchase a Tampa Bay condo, you need to inspect more than termite activity and plumbing; you need to look at things like:
- How is the community run?
- What do the HOA fees pay for?
- Are there any upcoming capital improvements that will require special assessments?
- What kind of shape are the financials in? (Fannie Mae and FHA need the condo fee delinquency rate to be at or below 15%)
- What is the ratio of renters to owner-occupied units? (Be careful of this one too, if you are purchasing with intent to rent, some associations impose a ratio that may preclude you from renting the unit if they’re at their allowable max.)
- Confirm everything that is covered by your association dues so you don’t assume you are not responsible for the roof, the trash, and pest treatments, and things that will definitely add up.
At the end of the day, if you approach a condo purchase as if you were buying or investing in a company, you will achieve both loan approval and peace of mind. (And you’ll beat the underwriters to the punch because this is all the stuff they are going to investigate!)