On Monday February 28 the Chicago Tribune ran this article, by Mary Ellen Podmolik. It points out one large item that the buyer does not have the ability to change when looking at condos--the ability to obtain a loan when the building does not meet lenders' criteria.
There are at least five criteria that can eliminate a building from receiving a loan from any Fannie Mae, Freddie Mac or FHA lender (most of the lenders!).
1 How many units in the building are currently rented? Lenders prefer owner occupied buildings, so the lower the number the better.
2 What is the financial position of the condo association? What are the reserves? While there is no set rule, the budget needs to show that adequate reserves are kept. The association needs to be collecting all the monthly assessments, delinquent units may make the building unqualified.
3 Is there any outstanding litigation with the condo association? Financial liability by the association can cause lenders to walk away.
4 In a brand new building, what is the percent of units sold? For an FHA loan it must be at least 51%, for conventional loans generally over 70%.
5 How much of the building is commercial space? If it's over 25% of the square footage, no loan.
For more information, please read the Tribune article.
In Bucktown/Wicker Park there were nine closings this week.
Do you have a topic you'd like to see explored, or would like more information on properties currently on the market, or selling your home, drop me a note at EvaB@atproperties.com
About Eva:
Eva Bergant is a Bucktown resident and local Realtor with a community driven style. In addition to being the president of the Bucktown Community Organization (BCO), Eva has served as chair for the annual Bucktown Garden Walk for the past three years. You can reach Eva by email or at 312-543-6819.
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