The behavior of others can affect you. The delinquent payment of condo dues of other condo unit owners can affect you. How? I have client who wants a mortgage to buy a unit in a small condo. The condo has 8 units total. I just found out that 2 of the 8 unit owners are currently delinquent on their condo dues.
Fannie Mae only allows a 15% delinquency rate on condo dues, 2 of 8 units being delinquent is 25%! So the loan will be rejected until we can get 1 or 2 of these current units owners to pay their back dues. If only 1 of 8 is delinquent that is a 12.5% delinquency rate, which would fall under the 15% limit, and we could get the loan approved.
It does not seem fair when an otherwise well run condo has a few unit owners who are behind on dues, and that is going to affect someone who wants to be a new unit owner in the building. This shows the behavior of others can affect all of us!
Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.
Tags: condo dues, condo loans, delinquency levels
