To view our videos, you need to
enable JavaScript. Learn how.
install Adobe Flash 9 or above. Install now.

Then come back here and refresh the page.

Getting a mortgage is harder than ever, but many don’t realize how often it’s unqualified buildings, not buyers, that are killing deals. Condominiums that don’t have their financial ducks in a row are finally getting the picture and are realizing that they need to seek Fannie Mae and FHA approval in order to survive in this real estate jungle.

“Buildings are finally figuring out that in order for people to be able to buy units and get financing within them that they actually have to be compliant with guidelines that were issued by FHA and Fannie Mae. There is a mad rush for this right now. Everyone wants to get the projects approved,” says Orest Tomaselli, CEO of National Condo Advisors.

Tomaselli’s company helps buildings get through the approval process, and nowadays he is inundated. He says in today’s tough market, these approvals are critical because they make sure qualified buyers can get financing, and FHA approval even more so: it makes lending accessible to those who wouldn’t quality for a Fannie-backed loan and gives owners looking to refinance a new option.

“FHA is so important to have in existing condominiums right now because homeowners need to refinance. Sometimes credit score requirements are not high enough for Fannie Mae transactions and it’s important to make sure the building has good financial standing so homeowners can actually pay their maintenance,” says Tomaselli.

Tomaselli says seeking approval often involves adjusting reserve funds changing bylaws or resolving litigation. It can be quite a process.

It’s worth noting that it’s not the same for co-ps. While they must be compliant with Fannie Mae, they undergo a different process and don’t qualify FHA lending.

Joseph Taube of Taube Management Realty manages several existing condominiums and has been working to get many of them quickly approved.

“If you don’t have this, you’re really not in the game. If you are not Fannie Mae or FHA-approved, you will suffer because you really want to make people come to your property to buy,” says Taube, “and if you’re not going to do this, they will go to another building and you’ll be out.”

These approvals instantly boost property values because owning a home in a building that banks are willing to lend in is the one luxury many can’t live without.