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Frederick MD Real Estate

Real Estate News for Frederick County Maryland

By Chris Highland | Agent in Frederick, MD
  • Changing FHA Rules will Affect Your Frederick Condominium Purchase

    Posted Under: Home Buying in Frederick, Home Selling in Frederick, Financing in Frederick  |  March 13, 2011 2:40 PM  |  607 views  |  1 comment

    Changing Condominium Rules Affect Frederick Buyers

    Condominium rules have changed drastically since the “housing meltdown”.  FHA recently (Oct. 1) drafted newer, stricter rules for approval of Condominium Developments seeking FHA financing.

    Condominium ownership is different from townhouse or single-family ownership, which are called “fee simple”.  The entire development must meet certain rules for even a single unit to receive FHA financing.

    FHA used to allow relatively simple Spot approvals for condo’s that were not approved by FHA.  Now it is a major process so lenders are not taking the risk to do it for one unit, on a building that is not already FHA approved.  This has greatly diminished FHA financing on condos.

    Conventional financing process is much more involved than previously.  It requires an analysis of the condominium development’s budget, bylaws, and a questionnaire that the lender provides.

    Waterside Condominiums

    Condominiums in Waterside

    The usual deal killers are as follows

    • Condo dues delinquency greater than 15% (with so many condo’s in foreclosure, there are lots of unpaid dues adding up.)
    • Investor concentration too high (there is no set figure for owner occupied purchases but lenders get nervous when the amount of investor-owned units is over 40%)
    • Pending litigation, and
    • Insufficient budget.
    There are others, but those are the usual suspects.

    Forget new condos less than a year old, they never fit.

    The list of specific condo developments that do not meet the criteria is a moving target. One could fit one month and not the next, and vice versa. One can lookup approved FHA condos by county on the HUD Website.

    This is partly why condo prices have declined at a faster pace and at a greater percentage that single-families and townhouses. They will likely continue to do so as more of them become “un-lendable”, and therefore fill with more investors paying cash or using unconventional financing sources.

    A guest post by:

    D. Michael Giampietro

    VP/Branch Mgr
    M&T Bank/Mortgage Division
    195 Thomas Johnson Dr., Frederick,MD 21702
    301 846-2063 office
    301 846-2097 fax
    301 639-3968 cell  800 380-2193 x2063 toll free
    Thanks Mike!
    As of Today, Condominiums in Ambertowne and Frederick Heights are not able to be purchased with FHA financing.

  • Do I Need to Get a Home Inspection When buying my Frederick Home?

    Posted Under: Home Buying in Frederick County  |  October 8, 2008 9:04 AM  |  214 views  |  No comments

    The question of whether to get a home inspection or not pops up regularly in my conversations about real estate.  Rewind the RE memory a few short years ago, when the market was hot; buyers dared not ask for a home inspection.  When they were in competition with 5 other offers, they had better offer more than the amount asked, and forego as many contingencies as possible.

    Fast forward to today, when we’re deep into a buyer’s market, some might call it “buyer’s revenge”:)  When the home has been on the market an average of 144 days, it’s probably had a few price reductions, and showings have slowed to a crawl with one every 2 weeks, this is the time for a buyer not to be shy.  A home inspection is your right, and is almost always a good idea, even in new construction.  Let me relay a couple of stories to illustrate:

    A.  The buyer’s had ratified an offer on a newly constructed townhouse, with the help of a buyer’s agent.  Fortunately the buyer’s listened to the agent’s advice and had a home inspection contingency written in the offer.  The afternoon of the inspection, the buyers were sitting in the living room with the inspector as he was finishing up with the last details of the report.  They were jolted out of their metal folding chairs with the sound of a series of loud crashes and clangs from the garage.  They all rushed out the kitchen door into the garage to see the jacuzzi tub from the master bath sitting amongst the wet drywall rubble.  In unison, with mouths gaping open, they raised their wondering gaze to the huge hole in the ceiling. 

    As it turned out, the plumber had negected to attach the drainage pipe from the tub to the main in the wall.  When the inspector filled the tub, then unplugged it, all that water drained into the floor and drywall.  One hour later, the floor gave way.  Who would have suspected it in a brand new house?

    B.  Yesterday, I spent a lovely 2 hours with a first-time buyer and my favorite home inspector.  We were at an older home with over $30,000 in renovations, all beautifully done.  We discovered, because a series of fixes had been done by different electricians over the years, that the electrical wiring wasn’t even grounded.  All the electrical work was done by a licensed contractor.  He had just missed the fix of a previous fix which altered what had originally been a grounding line.  Who would have suspected a licensed electrician would have missed it?

    The cost of a home inspection can be anywhere between $300 and $500 on the average house.  It is so worth it when you find something major.  If you discover something that you just can’t live with, ie. a cracked foundation, the inspection is the contingency that gets you out of having to buy the home…off the hook, and gets your deposit back.  If its a paragraph 21 item, and you still want the house, the inspection is the contingency that is your leverage to get the seller to fix it.

    I would also argue that it’s worth it even when you don’t find something major.  It is worth the peace of mind.  It is worth having a licensed professional going over your future home with a fine-toothed comb, teaching you all about the inward workings of your number 1 investment. Make sure they are certified Home Inspectors, either with ASHI, American Society of Home Inspectors, or NAHI, the National Association of Home Inspectors. In Maryland, State licensing of Home Inspectors is mandatory.

    The home inspection is your safety net, buyer.  If at all possible, write that contigency in.     At worst, you’ll give yourself an out. At best, you’ll give yourself peace of mind.


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