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Archive for the ‘Financing’ Category


New Fannie Mae Rules Will Help Miami Condo Prices

January 8th, 2010 · No Comments

Wow, that's all I can say! Fannie Mae just released a bulletin detailing a new Special Approval Designation for Florida Condominium Projects. As a result, you can now get financing in many condo buildings where cheap units were previously only available to all cash buyers.

Many existing condominium projects were previously made ineligible for Fannie Mae loans as a result of increasing delinquencies and foreclosures. As a result, prices fell precipitously in those buildings as the universe of potential buyers was drastically reduced. To illustrate, in a building like the Club at Brickell Bay in Downtown Miami / Brickell you could purchase a 1br unit for between $120,000 and $145,000, but it had to be an all cash transaction. On the flip side, to purchase a similar unit in one of the new buildings by the Related Group, you would have to pay almost double the price, but you would be able to get a loan. The quality of the Related Group's buildings is slightly better, but it doesn't justify paying two times the price. The difference is the financing.

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Posted in Distressed Properties, Downtown Miami / Brickell, Financing, Miami Beach | No Comments »


FHA Approved Miami Condos

October 22nd, 2009 · 3 Comments

In today's market, many buyers are using FHA backed mortgages to finance a purchase of a new home or condo. The FHA offers loans with as little as 3.5% down, which is very attractive, especially considering the $8,000 first time home buyer tax credit. According to a recent survey of home builders by John Burns Real Estate Consulting, the FHA has backed a staggering 62% of new home loans given in South Florida.

So, its no surprise that I have been working with many condo buyers lately looking to get FHA backed loans.  This has not been an easy task.  There are not many FHA approved buildings in the greater downtown Miami area.  I've compiled a short list below of the 10 or so buildings that I would consider showing to clients.

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Posted in Downtown Miami / Brickell, Financing | 3 Comments »


How Much Can I Afford to Pay for this Property?

August 6th, 2009 · No Comments

I've been working on finding an FHA approved condo for a client of mine and it's taken a little longer than expected because there are several moving pieces to the deal.  Usually when you look for a home and are preapproved for a mortgage, you know exactly how much home you can afford.  If you can afford (and are preapproved for) $150,000,  you would look at condos at or under that price.

However, when your lender thinks about how much home you can afford they think differently, and they look at your total monthly housing expenses relative to your income.  For a condo, monthly housing expenses would include maintenance fees, taxes, as well as your mortgage payment.  For each property, maintenance fees and taxes are fixed,  what the lender figures out is how much of a monthly mortgage payment you can make.  From the mortgage payment, the lender is able to calculate the mortgage amount, and when added to your down payment produces how much house you can afford.  What you need to keep in mind is that the more your maintenance fees and/or taxes are, the less house you can afford.

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Posted in Financing | No Comments »


Why the Market for Luxury Condos is Broken

July 13th, 2009 · No Comments

I happen to live in a nice area of Miami Beach commonly known as "South of Fifth or SoFi".  It's full of some of the nicest condo towers you can find anywhere in Miami offering wonderful amenities and offering great views of Biscayne Bay, Government Cut, and the Atlantic Ocean. In SoFi, you'll find a high concentration of luxury condos, and when I say luxury, I mean those priced over 1 million dollars.  The following exclusive SoFi properties are available and have been for a while:

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Posted in Financing, Stats and Trends | No Comments »


Miami Condos and Homes — No Money Down!

July 11th, 2009 · No Comments
Miami Condos and Homes -No Money Down

A little known fact in Miami is that it is still possible to buy a condo or home without any money coming out of your pocket.  Incredible, considering this is exactly what caused the current credit crisis.  So, who do we have to thank for making this possible?  Good ol' Uncle Sam.

The Federal Housing Administration (FHA) insures loans made to home buyers with as little as 3.5% down.  The program was designed to make home ownership affordable for those who didn't have enough money for a traditional down payment.  Through the FHA loan program, a local lender originates the loan, the FHA guarantees the payments, and the lender then sells your loan to an investor.  In return for the guarantee and low down payment, FHA-insured loans have a higher interest rate than conventional mortgages.  Currently, the rate for a 30yr FHA-insured loan is 1/2 percentage point higher than that for a conventional 30yr mortgage.  Current mortgage rates can be found here.

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Posted in Financing | No Comments »


When Buying a Condo in Miami, Cash is King

July 9th, 2009 · No Comments

With real estate prices in the Miami area retreating to levels last seen at the beginning of this decade, we have seen increased demand from clients interested in purchasing a second home or investment property.  There are many great deals to be had, but the potential pool of attractively priced properties is much larger for the all-cash buyer as opposed to someone who wants to finance their purchase.

At the beginning of 2009, Fannie Mae changed its guidelines for mortgages backed by new and established condominium projects.  A condo project is “established” if 90% of the units have been sold, is complete and the HOA has been turned over to the owners.  A condo project is “new” if less than 90% have been sold, is not completed, is subject to phasing or if the HOA has not been turned over to unit owners.

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Posted in Financing | No Comments »