The Saint Paul Condo Blog

With the Twin Cities losing market share in 2007, Fannie Mae and Freddie Mac (The two main lending houses, where all bank go to get their money) have labeled us a Declining/Restricted market.  It means that new requirements come in to play.  Mostly higher credit scores, but listed in the small print, is 10% down for condos.

This shouldn't affect some of the higher priced buildings in downtown, but the buildings where homes sell for under $200k, this might become an issue.  Most buyers in the under $200k don't have 10% to put down.  The only work around to the requirement is FHA financing.  Problem is, most condo buildings have not been approved by FHA.  HUD and FHA inspect both condominium documents and the building itself before issuing their stamp of approval.  In the last 5+ years, FHA financing has almost been forgotten.  But with the clamp down, FHA is becoming popular again.  With that being said, most of the buildings in downtown are not FHA approved.  The only building I know of in downtown that is approved, is MarketHouse in Lowertown.  I would guess they sought their approval during the last recession.

I have a feeling we will see a race to see what buildings can get FHA approval first, as that might make all the difference in the coming years!

Spot FHA financing is available, but only up to 10% of the building's unit total.  So as an example, say a building has 100 homes, only 10 could use FHA financing without the building being approved.  This might be the saving grace downtown needs, while these buildings seek FHA approval.