I just had a contract fall through on a condo the day before we were supposed to close because financing was denied. Financing was denied because the developers still owned 32% of the condos in the development and Fannie Mae would not warrant to loan. I have learned that the first question a buyer or buyer's agent should ask the condo association is whether or not any of the units are still owned by the developer. You will be hard-pressed to obtain a loan for a unit located in a community where a developer still owns more than 10%. My buyer had already gone through the inspection, received a loan commitment and the appraisal before the 32% developer ownership was discovered. The condos I am referring to were built in the 1970s, but developers apparently rehabbed the units. Had this question been asked by me or the mortgage broker or the seller or the seller's Realtor, we could have saved everyone (mainly my buyer) a lot of trouble and disappointment. Apparently, Fannie Mae is considering pulling out of condo market all together. This will mean a buyer will have to pay an inordinately high interest rate if they can find a lender to actually give them a loan or only cash buyers will be able to buy a condo. Hopefully this is not the case since the Florida condo market is already terrible. Don't let this happen to you!
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