condominiums – Page 3

July 18, 2023July 18, 2023

Revealed: How Fannie Mae’s Latest Condo Loan Policy Shake-up Could Protect Your Wallet and Well-being!

Fannie Mae Introduces Permanency to Condo Policy Updates. Loft Buyers Need to Know How to Overcome Unique Mortgage Hurdles

REAL ESTATE NEWS (Los Angeles, CA) — The U.S. Federal National Mortgage Association, better known as Fannie Mae, has recently confirmed updates to its policies surrounding condominiums and co-operatives, as announced in an email communication and followed by an article published on MPA Mag. The updates address various concerns related to projects with deferred maintenance, special assessments, and even some safety concerns, which had previously been only temporary provisions.

In a move that reflects the evolving landscape of condo ownership and financing, Fannie Mae is making many of these temporary provisions permanent. These provisions are designed to manage risks associated with aging infrastructure and financial instability in condominium and co-operative housing projects.

A Focus on Safety and Sustainability

The updates were first introduced on a temporary basis in 2021, with an aim to tackle the pressing issues of condo and co-op project safety and sustainability. This move came as a result of increased concerns over the aging infrastructure of such residential complexes, an issue that has been rising to the fore over recent years. Reports have suggested structural challenges have been leading to evacuations and condemnations in certain cases.

With the risk associated with these infrastructural challenges becoming more apparent, Fannie Mae has taken steps to implement the previously temporary provisions as part of its updated policies. This transition to permanency underlines the significance of these issues and Fannie Mae’s commitment to addressing them.

Addressing Deferred Maintenance and Special Assessments

The updated policies are designed to handle projects that need critical repairs, those having material deficiencies, and special assessments for projects consisting of five or more attached units. Essentially, Fannie Mae is prioritizing the safety, soundness, structural integrity, and habitability of condominiums and co-operatives and their amenities.

In order to accomplish this, developers are now required to disclose any required critical repairs and significant deferred maintenance that could potentially affect the aforementioned aspects of a condo or co-op project. This move towards transparency can provide prospective buyers with a clearer understanding of what they’re getting into when purchasing a unit in these projects.

Moreover, the Government-Sponsored Enterprise (GSE) has decided not to purchase loans secured by units in condo and co-op projects that require critical repairs or have unresolved significant deferred maintenance, until the necessary repairs are made. This is a clear move to protect both the agency and borrowers from potential risks associated with such properties.

Furthermore, Fannie Mae has adopted a new policy that requires lenders to evaluate special assessments thoroughly. This includes analyzing the reason for the assessment and evaluating the capacity of the unit owners to make timely payments for the assessment.

Promoting Safe and Sustainable Homeownership

In a blog post on Fannie Mae’s website, Jodi Horne, the director of single-family collateral risk management, expressed that the updated condo and co-op requirements aim not just to protect lenders and Fannie Mae from a risk management perspective, but also to safeguard borrowers from physically unsafe or financially unstable projects. These unstable projects could lead to unexpected spikes in homeownership costs, which can put homeowners in precarious financial situations.

In conclusion, the updates introduced by Fannie Mae underscore the organization’s commitment to promoting safe and sustainable homeownership. By making these temporary provisions permanent, the agency is taking proactive measures to ensure that homeowners, developers, and lenders are all protected from potential risks associated with condo and co-op projects. This move is likely to shape the landscape of condo and co-op ownership and financing moving forward.

What are the requirements and details of FNMA financing for a condo? Are all structurally sound condos approved for fnma financing? How, when and why does a home buyer and mortgage loan originator use FNMA for a condo purchase loan?ChatGPT

Fannie Mae (FNMA), being a government-sponsored enterprise (GSE), plays a critical role in the mortgage market by buying loans from mortgage lenders, packaging them into mortgage-backed securities, and selling them to investors. This process provides lenders with the liquidity needed to keep providing loans to borrowers. For condo purchases, Fannie Mae sets specific guidelines for loans to be eligible for purchase. Loft buildings sometimes have a harder time meeting the requirements, but loft specialist lenders are familiar with the solutions.

Fannie Mae Condo Requirements:

While individual lenders might add their own requirements, Fannie Mae provides a standard set of guidelines that need to be met for a condominium to be eligible for financing. These guidelines include:

Project Completion: The project in which the condo is located must be completed, including all units and common elements.
Owner-Occupancy Ratio: Fannie Mae typically requires at least 50% of the units in a project to be owner-occupied. This rule can help ensure the stability of the condo association.
Delinquency Rates: No more than 15% of the total units can be 60 days or more past due on their condo association dues.
Insurance Coverage: The homeowners association (HOA) must maintain a master or blanket insurance policy that covers common areas. Individual owners must also have insurance for personal property and liability.
Budget Review: The project’s budget should be adequate to manage and maintain the property, with enough set aside for reserves.
Single Entity Ownership: No single entity (like a person or an investment group) may own more than 10% of the units in a project.
Legal Phasing: For projects with multiple phases, each phase must be legally separate with its own budget and financials.
Litigation: The condo association should not be involved in any litigation that relates to the safety, structural soundness, or habitability of the project.
Commercial Use: No more than 35% of the project’s total floor area can be used for commercial purposes.
Special Assessments: If there are special assessments, the lender must review them, including the reason for the assessment and the ability of unit owners to make timely payments.

Are All Structurally Sound Condos FNMA Approved?

Even if a condo is structurally sound, it doesn’t automatically mean that it will be approved for Fannie Mae financing. It must meet all the other requirements listed above.

How, When, and Why Use FNMA for a Condo Purchase Loan?

Home buyers and mortgage loan originators use Fannie Mae for condo purchases primarily when the condo meets all Fannie Mae guidelines and the buyer meets the borrower requirements set by Fannie Mae (such as credit score, debt-to-income ratio, etc.).

Home buyers may choose to use Fannie Mae-backed loans because these loans often come with competitive interest rates and can require lower down payments. Additionally, they may also offer more lenient credit requirements than other loan types.

For loan originators, selling loans to Fannie Mae allows them to remove the loans from their books, freeing up capital so they can make more loans. They can also potentially earn income from servicing the loan if they retain the servicing rights.

It’s crucial to note that if a condominium doesn’t meet Fannie Mae’s guidelines, it’s considered non-warrantable, and financing options can be more limited. However, some lenders specialize in non-warrantable condo loans, and alternative financing options might be available.

Are most condo loans FNMA? What percentage of condo loans are FNMA?

The exact percentage of condominium loans backed by Fannie Mae (FNMA) can fluctuate over time and is not publicly disclosed on a regular basis. However, it’s important to note that Fannie Mae, together with Freddie Mac, another Government-Sponsored Enterprise (GSE), is a significant player in the U.S. residential mortgage market.

Fannie Mae and Freddie Mac together own or guarantee about half of all mortgages in the United States, including a significant portion of condominium loans. The rest of the market consists of various other players such as the Federal Housing Administration (FHA), Veterans Administration (VA), private lenders issuing jumbo and non-qualified mortgages, and others.

Fannie Mae and Freddie Mac have traditionally been popular choices for financing condominiums due to their favorable terms, relatively low interest rates, and less stringent credit requirements compared to some other types of loans. However, they have specific criteria that a condominium project must meet to be eligible for their loans, which can sometimes limit their use in certain situations.

If a condominium project doesn’t meet Fannie Mae or Freddie Mac’s guidelines, it may be considered “non-warrantable,” and the availability of Fannie Mae or Freddie Mac financing for units in the project will be limited. In these cases, potential buyers might have to seek alternative financing options, such as portfolio loans from banks or other lenders.

Some loft buildings have issues that affect their qualification for financing. To avoid delays and loan failures, such as falling out of escrow, it is often advisable, sometimes a requirement, to use a loft specialist lender when financing the purchase of an industrial, historic conversion or live/work loft condominium. A free list of local loft lenders is available upon request. Fill out the online form:

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

July 5, 2023July 5, 2023

10 Shocking Secrets Interior Designers Use to Transform Tiny Spaces – Number 6 Will Blow Your Mind!

Maximizing Style in Compact Living Areas

Interior design is a powerful tool that can transform any space into a functional and stylish haven. When it comes to small spaces, such as compact apartments, condos, or lofts, the challenge of creating a seamless blend of style and functionality becomes even more exciting. With a little creativity, resourcefulness, and a keen eye for aesthetics, you can make every square foot count. This blog post aims to offer inspiration and valuable tips to help you maximize space and create an alluring interior design in your small dwelling.

The Art of Illusion

To make small spaces appear larger, you have to master the art of illusion. Color, light, and mirror placement play significant roles in altering perception. A loft with views requires less decor. A loft with no view looks its best with plenty of fancy furniture and exciting decor. Spectacular ceiling lamps can help make up for a unit with insufficient natural light. A loft with plenty of floor-to-ceilings windows and stunning views looks best with minimalist furniture and sparse decor.

Color and Light
Bright, light-reflecting colors like whites, pastels, and neutrals, when applied to the walls, ceilings, and floors, make the room appear larger by creating a seamless flow of space. Darker hues can also be used strategically to give depth, but lighter colors are generally more effective at opening up a room. Black or dark colors can be used to make a less attractive area disappear, to make it look smaller, recessed, or less prominent.

Natural light is another powerful tool in expanding a small space. Let in as much daylight as you can by using minimal window coverings or using translucent materials that let light in while maintaining privacy. If natural light is limited, invest in good artificial lighting. A mixture of ambient, task, and accent lighting will ensure a well-lit and inviting space. Modern wallpaper and upscale wall sconces will turn a dim interior wall into a glorious feature.

Mirrors and Reflective Surfaces
Mirrors are an essential component in the arsenal of small space design tools. A well-placed mirror can visually double your space by reflecting light and creating an optical illusion of extended space. Reflective surfaces such as polished metal, glossy paint, or glass furniture can also amplify the effects of light and mirror reflections. A mirror that reflects a window can help make up for a wall that lacks its own windows.

Multifunctional and Scale-Suitable Furniture

Choosing the right furniture can make or break a small-space design. It’s crucial to consider both scale and function when selecting pieces for a compact room. A small loft should have smaller furniture and decor. An oversized room looks best with oversized furniture and oversized decor.

Multifunctional Furniture
Invest in pieces that do double duty, such as a coffee table with storage or a sofa bed. A bed with built-in drawers or a loft bed with a study or workspace underneath can save a ton of space. Nesting tables are great too, as they can be spread out when needed and tucked away when not in use.

Scale-Suitable Furniture
Small spaces demand furniture that fits their scale. Oversized pieces can overwhelm the space and make it feel cramped. Opt for streamlined furniture with a smaller footprint and choose designs with raised legs, which create a sense of light and space.

The Magic of Vertical Space

When floor space is limited, the sky (or in this case, the ceiling) is the limit. Vertical space is often underused in small rooms but is an excellent resource for adding storage and displaying decorative items.

Vertical Storage
Consider adding shelves or cabinetry that reach up to the ceiling. This not only provides more storage but also draws the eye upwards, making the room feel taller. A tall, slender bookcase or a wall-mounted shelving unit are both good options.

Hanging Elements
Use hanging elements like pendant lights, hanging plants, or wall sconces to create interest and draw the eye upwards. A hanging rack in the kitchen can be a stylish and functional storage solution for pots and pans.

Declutter and Organize

Clutter is the enemy of small spaces. It’s crucial to keep things tidy and organized to maintain a sense of spaciousness. Use organizers, baskets, or boxes to keep your stuff neatly stored. Keep only what you need and love, and regularly declutter to prevent items from accumulating. Three’s Company: An entire shelf filled with tchotchkes can be made stylish by displaying just the three best pieces together, and putting the rest away out of sight.

Industrial Lofts

Designing for open, industrial loft spaces with high ceilings provides a unique opportunity to balance raw, rugged elements with tailored sophistication. The exposed bricks, ductwork, and large factory-style windows that typically characterize these lofts are ideal for a minimalist, modern aesthetic. To complement the high ceilings, consider using oversized pendant lights or a large-scale chandelier to draw the eye upwards and create intimacy in a broad space. Opt for a mix of large, sturdy furniture and smaller, more refined pieces to fill the space without overwhelming it. Use area rugs to define different zones within the open plan, and add layers of texture with elements like leather, faux fur, or velvet to contrast with the hardness of the industrial features. Wall art can also be displayed at an elevated height to emphasize the lofty feel. The goal is to create a harmonious blend of raw, industrial charm and contemporary chic that’s both functional and visually compelling.

While designing for small spaces can be challenging, it can also be incredibly rewarding. It’s a test of creativity, encouraging you to maximize every corner and make the most out of what you have.

By using tricks like light, reflective surfaces, and scaled furniture, you can make your small space feel larger and brighter. Multifunctional pieces and effective use of vertical space will help to ensure every square inch is utilized, providing maximum functionality without sacrificing style. Finally, remember that organization and regular decluttering are essential to maintaining a sense of openness and calm in a small space.

Mirrors Are Magic: Interior designers often use mirrors strategically to create the illusion of more space, making a small room feel twice as big.

Ceilings Deserve Color: Many people ignore ceilings, leaving them plain white. But painting them can dramatically change the feel of a room, making it feel cozy or more spacious, depending on the color.

Floor-to-Ceiling Curtains: Hanging curtains from the ceiling to the floor, even on small windows, can create the illusion of height and grandeur in any space.

Go Big with Rugs: Contrary to popular belief, small rugs can make a room feel smaller. A large rug can visually expand the room.

Statement Pieces Aren’t Just for Big Rooms: A statement piece like a bold piece of art or an oversized lamp can make a small room feel intentional and styled rather than cramped.

The Invisible Shelf Trick: Believe it or not, one surprising trick that interior designers use to maximize small spaces is the “floating” or “invisible” shelf technique. By painting shelves the exact same color as the wall, they blend into the background, creating the illusion of objects floating in mid-air. This creates a striking visual effect, drawing attention to the displayed items while also making the room feel less cluttered and more spacious. It’s a playful yet practical design trick that often leaves guests scratching their heads in amazement!

Lighting Layers: Don’t rely solely on overhead lights. A combination of task, accent, and ambient lighting creates depth and can make a space feel larger and more inviting.

The Power of Vertical Stripes: Vertical stripes, whether in wallpaper, curtains, or rugs, can visually lengthen the walls, making a room feel taller.

Contrast to Create Depth: Using contrast, either through colors or textures, creates visual interest and the illusion of depth, making a space feel larger.

Bold Walls Make a Statement: A bold, dark wall can make a narrow room seem wider by creating a sense of depth.

Use Furniture That’s Off the Floor: Furniture pieces with visible legs give the impression of more floor space, creating a sense of openness and flow.

So embrace your small space and see it not as a limitation, but an opportunity to get creative and design a comfortable, stylish home that is uniquely you. Remember, a small space doesn’t mean you have to compromise on style or functionality – it’s all about making smart choices and using a little design know-how. Happy decorating!

Get a free list of live/work lofts for sale or for lease in Los Angeles. Fill out the online form.

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