NAMB’s White says August condo rule changes will push buyers into higher-rate loans
Kimber White (pictured top), NAMB president, has been making the case for a delay directly on Capitol Hill, including a recent call with the Senate Banking and Finance Committee. He said the FHFA has given no indication it will change course.
“They are still pushing that. They’re not going to change that, I think,” White told Mortgage Professional America. “We’ve sent a call to action out to make them understand to at least delay the implementation. We understand that we want to make sure that the borrower’s collateral is secure, that the agencies are secure, and that borrowers are buying something that’s going to have sustainability and longevity in it.”
Pushing borrowers into higher rates
Under the new requirements, any condominium project with insufficient reserves will no longer qualify for conventional financing through Fannie Mae or Freddie Mac, White said. Borrowers in those projects get pushed into alternative financing at materially higher rates.
“If it’s short on reserves, it’s not going to get approved,” he said. “You’re going to have to go to alternative financing, which is going to drive people into higher rates. And those properties aren’t going to be able to be sold.”
The state of Florida is a useful case study, he said. The governor extended the deadline for condo associations to reach the 10% reserve threshold until 2027, and roughly 30% of the condos in White’s market still have not reached it.
