Hello all,

Trying to purchase a short-sale unit in a 4 story condo in Miami. 15 year loan with 20% down, offered a rate of 4.875% locked on 8/13/2009.

All paperwork on my end is fine, but a potential problem is the Condo has a delinquency rate of approximately 17% of tenants not paying their association fees. Nevertheless the building is well maintained.

The limit for approval with my lender is 15%, and I've been told this is a rule set by Fannie Mae. The lender has asked for the last two years financial statements for the condo association, which I provided yesterday afternoon, but have not heard back from my lender as of yet, and I'm getting concerned as my closing date is coming up in two weeks.

I hope this gets resolved but I'm afraid this deal will fall through all because of this delinquency rate, which I have nothing to do with.

I am considering looking at other lenders, but I'm wondering if this delinquency rate is going to make this a waste of time no matter where I go. Does almost every lender sell their loans to Fannie Mae?

Any advice would be greatly appreciated.

sincerely,

a very concerned buyer in Miami

Some lenders will do a limited review on the condo if you can come up with another 5%.

Hi Melvin,

Thank you very much, that information is extremely helpful.

It is good to know that adding another 5% to the down payment for a limited condo review is a typical option, as that is what another lender offered me, albeit at 0.125% higher interest rate than my previous offer with my other lender (4.875% before, 5% offered now). 

thank you,

Concerned buyer in Miami

My advice is to seek out a local Credit Union in your area that provides mortgages and discuss this with them.  Usually they are able to offer flexible underwriting criteria, especially when you are putting at least 20% down and they are able to portfolio the loan.  Basically, if they can fund their own loan and keep the servicing on it, they can be flexible. You will need to become a member of their credit union which usually only means opening up an account with a $25 balance.  You should be aware that most of the products they will portfolio are not Fixed, but are Adjustable.  The rates should be very competitve though and you can always prepay the loan at any time, but do check with them on this as one credit union may be different from another.

Good Luck.