There is no question that real estate sales are in the dump and home owners have little chance of selling. But an interesting article in the Hartford Business Journal sheds additional light on why scores of new high-end condos in West Hartford and other places remain unsold.
Two newer regulations by Freddie Mac and the Federal Housing Administration – which insures mortgages – have a specially harsh impact:
One rule requires that 70 percent of the units be sold before conventional mortgages will be approved. The rule used to require 51 percent.
“In addition, to meet Fannie Mae standards no more than 15 percent of c ondo units can be more than 30 days late on monthly maintenance fees, and no more than 10 percent of a project’s units can be owned by a single investor,” says the article written by Greg Bordonaro.
“Fannie Mae’s regulations center on determining which condo developments qualify for conventional mortgages. Essentially, officials want to create more certainty that condominium buildings and their associations are financially stable before Fannie Mae buys or backs a loan to condo buyers who take residence there.”
These rules are why you continue to see for sale signs on the Loomis-Wooley development on Prospect Avenue. Developers are now renting their units.
