Tight Condo Lending Holds Markets Back and affects recovery

By
Real Estate Agent with Boston Luxury Residential

Fix over-restrictive condo financing rules, and you’ll fix the real estate market. That was the message on Saturday from Bob Waun, a vacation-home lending specialist who spoke at the Resort and Second-Home Forum at the 2010 REALTORS® Conference & Expo in New Orleans.

Waun, who’s part of the lobbying group called the Residential Condo Finance Reform Coalition, said that because credit and financing options for condos has been scaled back in recent years, particularly by Fannie Mae, markets all over the country are suffering. It’s especially true in resort areas with a high density of condominiums.

At the root of the problem is that lenders perceive condos as too risky if the project contains mixed-use development, if it’s considered a “new” project, or if the condo will be used as a second home, among other things.

“Lenders need to have a better understanding of mixed-use,” Waun said. “If a business closes in a mixed-use building, how is that impact any different than if an Applebee’s closes down the street from a subdivision? Lenders need to use new tools to measure condo project risk.”    

Prime condo buyers include baby boomers and echo boomers who value walkable neighborhoods and minimal home maintenance. If more mortgage money becomes available for condos, it will foster walkable communities and help soak up some of the condo inventory in built-up markets.

“People want proximity to restaurants and services,” Waun said. “They want to be able to walk to the movie theater and the grocery store. But if your clients don’t have the money, they won’t buy.”

Waun urged attendees to join his coalition’s call for sensible condo finance reform.

Kelly Quigley, REALTOR® Magazine

Posted by

C.H. Naamad
Broker

Boston Luxury Residential
BostonLuxuryResidential.com
ch@blrboston.com
Cell: 617-407-9740

 “If you have any questions about Boston real estate, or desire more information about a property, please contact Boston Luxury Residential: C.H. Naamad:  617-407-9740, or email @ ch@blrboston.com  to begin working for you.”  

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