Fannie Mae plan could bring life to condo sales

In a bid to jump-start sluggish Florida condo sales, Fannie Mae has launched a special project to identify stable, established condominium projects in the state where it is willing to lend.

The government-sponsored corporation that buys or backs mortgages on Thursday unveiled a list of 51 projects in Miami-Dade County that already have gotten ``special approval,'' signaling to mortgage bankers that Fannie Mae will accept loans made on condo units at those locations.

More condo projects in South Florida and across the state will be added to the list.

In 2009, Fannie Mae implemented a slew of new regulations governing condo projects that some claimed strangled the market by stigmatizing Florida condo loans. Some frustrated lenders weren't even sending loans for approval.

``This is great news for our market,'' said Ed Wilburn, a managing director for the residential lending division at Great Florida Banks in Miami. ``This takes away a lot of the uncertainty for lenders.''

A team of six Fannie Mae representatives has been dispatched to examine hundreds of condominium projects around Florida -- ground zero for the nation's housing debacle -- to identify those that may not meet Fannie's usual criteria but seem stable enough for lenders to originate mortgages that are turned over to Fannie Mae.

``It's a positive step to think that our largest lending institution in the country is focusing on our market,'' said Ron Shuffield, president of real estate firm Esslinger Wooten Maxwell. But he said, ``This is certainly not as dramatic as the tax credit program when you're giving buyers cash money back.''

The Fannie Mae team will be looking at specific criteria, including a project's occupancy, delinquency rates on homeownership association dues, the financial stability of the project, and the maintenance and condition of the property.

Up until now, Fannie Mae has made special exceptions to its condo eligibility guidelines on a case-by-case basis when mortgage lenders filed requests but not many lenders were testing the waters.

The new procedure aims at streamlining the process by clearly listing Florida projects that are eligible.

The approved list includes projects such as the 810-unit Grand Condominium at 1717 N. Bayshore Dr., the 420-unit Latitude on the River at 185 SW 7th Street, and the 330-unit Blue at 601 NE 36th St., all in Miami. Also making the list were Roney Palace, a 569-unit condo at 2301 Collins Ave., Miami Beach, and the Jockey Club, a 169-unit project at 11111 Biscayne Blvd. in Miami.

The special approval designations are effective for periods of 9 to 18 months.

``This new initiative is geared toward providing maximum support for Florida's distressed condo market as we continue to provide liquidity to the housing market more broadly,'' Karen Pallotta, a Fannie Mae executive vice president for single family mortgage business, said in a statement.

Peter Zalewski, a condo market analyst and broker with Condo Vultures in Bal Harbour, was muted in his reaction.

While Fannie Mae's effort marks another step toward restoring financing in Florida's condominium market, Zalewski said, he doubts the list of approved condos will spur many bankers to resume making condo mortgages. Among banks, ``most regionals and locals are not even going to look at it. They're in hibernation mode,'' Zalewski said.

Most sellers, Zalewski said, are looking for cash buyers rather than those whose offers are contingent on financing. ``The sellers are looking for someone who can close quickly.''

Fannie Mae's initiative to ease the mortgage credit crunch comes as South Florida's bleak condominium market is beginning to show encouraging signs of improvement.

Sales have been picking up, albeit at bargain basement prices. In November, sales of existing condos in Miami-Dade were up 48 percent from the prior year, while the number of listings was down by 30 percent. That still means there were 16,665 condos in Miami-Dade for resale, a two-year supply and almost twice the number of single-family homes.

Source: http://www.miamiherald.com/1382/story/1415119.html