Mortgage rates remained unchanged this week. The condo market is experiencing new roadblocks courtesy of mortgage giants Fannie Mae and Freddie Mac.
On March 1, Fannie Mae stopped guaranteeing mortgages in new or newly converted condo developments in which fewer than 70 percent of units have been sold or are under contract. Fannie’s previous rules set the cutoff at 51 percent.
Freddie Mac recently sent a bulletin to sellers and servicers announcing plans to adopt similar restrictions wholesale beginning July 1.
The Fannie changes are especially unwelcome in cities such as
Fannie Mae’s presale guidelines target new developments, typically defined as projects where the developer has not yet turned over the homeowners association to the owners.
However, existing communities are not immune. Older Fannie rules in place for years have started to hamper mortgage activity in previously stable communities now struggling as the condo market sags.
For the past couple of years, Fannie has refused to guarantee mortgages for purchase in existing condo communities where 15 percent or more of owners are delinquent on their association fees by at least 30 days. Such delinquencies have become epidemic in complexes with many foreclosures.
The 15 percent HOA delinquency requirement now applies to both new and existing condo projects. Previously it only applied to existing condo projects. In addition, Fannie does not guarantee loans in new or existing communities where more than 10 percent of units are owned by single entity or where more than 20 percent of the total space in a project is used for nonresidential purposes. Developers who do not meet the 70 percent threshold can ask Fannie to waive the restrictions in certain circumstances.
As of the fourth quarter of 2008, Fannie Mae and Freddie Mac together owned or guaranteed 56 percent of the 55 million mortgages outstanding in the
Forty years after those students followed Dean James Elmore’s assignment to “do something with the river,”
“
Mitchell had a strong hand in getting the project off the ground. He was mayor of
“I was born and raised here, and to allow a valuable piece of real estate to go unused simply wasn’t acceptable,” he said.
Some early plans called for
“They would have had to have done something like that anyway to locate the freeway along there. It was really a win-win, and it was a compromise,” Mitchell said.
From boondoggle to economic driver
Many residents today can’t imagine
“I have never experienced
Now
“But back then, we were having our first economic downturn and nobody wanted to build a thing,” Anaradian said. “A lot of people were upset by the creation of it. There was a lot of criticism that it had been a waste.”
That prompted him and his staff to focus on events, with the hope that drawing people to see the newly filled lake would highlight the area’s possibilities and spur additional activity.
“We had a strategy for the project. We talked about the ‘community living room’ — you would hear that phrase a lot,” Anaradian said.
And even though he now holds a different position with the city, it’s hard for Anaradian to shake off his former duties.
“I don’t like to go there,” he says of the lake. “I always see things that need to be done or ways that things can be improved. I am never happy.”
Still, he is proud to have contributed to the lake’s reputation as an asset.
“I don’t think the lake has that negative perception anymore,” he said.
While the lake is a destination for many large annual events including Octoberfest, the Tempe Music Fest, and New Year’s Eve and Fourth of July parties, it is becoming an everyday destination for many because of the bike paths, the beach park and the Hayden Ferry Lakeside mixed-use development.
More development
SunCor is developing Hayden Ferry Lakeside along the lake’s southern shore. It includes office, condo, and retail space, including SunCor’s office.
“I have been working on this project for 10 years. I have been here right from the beginning,” said Randy Levin, vice president of commercial/urban development and design for
SunCor expects to build additional condominium and office space along the lake’s northern shore so that the project’s updated name,
“This area has always been desirable and it will continue to be so,” Levin said. “Having a lake like this in the center of a metro area — I don’t believe this will ever be duplicated in
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That, in a nutshell, was the conclusion of a November 2006 Fortune story on the surprising correlation between the National Association of Home Builders’ builder confidence and one-year lagging returns of the Standard & Poor’s 500 stock market index. more…