Will fanny mae decline our mortgage if our HOA's expenses is slightly higher than the income?
Our HOA has close to 10K in the bank. It also has a separate savings account with some money (not much, but some) and it is saving close to 10% of our income. However, this year, the total expenses will be higher than the income by $1K. The HOA is working on adjusting the due and we are showing positive for 2010 and 2011. If we send this budget to a bank for a mortgage, are they going to decline us based on the new guidelines by fanny mae?
it is a 6 condo building, and yes, it is quite old.... Does fanny mae have the right to deny me a loan given my HOA situation, or you think they ask the budget just so they have it for their records?
What is your loan to value? they usually don't ask for the budget but they do want to see reserves. Probably the older the building the more reserves required as the maintenance requirements are higher. If it is a 2 condo building or a small complex like a 4 condo building, it is not an issue. How many units are there in the complex?
June David
REAL ESTATE LOANS, licensed with
Guarantee Mortgage
636 Fourth Street (at Townsend)
San Francisco, CA
Off: 415 242-1877
Cell: 415 793-7566
Fax: 415 694-5501
http://www.junedavid.com
DRE License no. 01153351
These days, Fannie Mae does want to see cash reserves in addition to a budget that balances.
However, there are ways around this. If your loan to value is pretty low, most lenders will not ask for a budget in the first place. Pursue a loan where you can have a Streamlined Condo Review -- your mortgage broker can steer you in the right direction. The budget will not come up as an issue if you place the loan correctly.
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