Condo Association Funding Requirements For Fannie Mae Loans
Fannie Mae is becoming more strict with their loan requirements as they deal with how much money condo associations keep in reserve. Every condo association is unique, and they cover a number of services for their residents. Some cover trash, water, even cable tv in some cases. Most associations cover the maintenance of the exterior of the units; paint, roof repairs, gutters, landscaping, and community shared resources like pools and playgrounds.
Condo Association Finances
Recently Fannie Mae has been scrutinizing the financial strength of these associations before they will make a loan. Fannie Mae wants these associations to have at least 10% of their total annual budget in reserve. The lender wants to make sure that in the case of a weather emergency such as hail or a wind storm, the association has the funds to make the repairs to their investment. Remember – the lender owns the home and the homeowner makes mortgage payments to buy it back from the lender.
If you live in a condo or townhouse community that has a condo association you should make sure that they are keeping their reserve fund fully funded. Attend the meetings and ask for copies of the budget so you are always informed. Keeping your association on the right fiscal track will help make your community more attractive to buyers and to the lenders who will finance their purchase.
If you are interested in buying or selling a condominium in Cincinnati please call me at 513.518.1140
At The Alison Moss Group, Cincinnati is more than a city to us–it’s our hometown. Since launching in 2008, our clients have depended upon us to lead them through the home buying and selling journey. We are the go-to resource for all of your needs before, during and after the sale of your home.