Condo market getting a boost

Florida condominiums deemed too risky to qualify for financing are getting a second look from mortgage giant Fannie Mae.

The mortgage finance company, which had toughened requirements for obtaining condo mortgages in Florida, is reviewing hundreds of complexes. Many projects that did not qualify soon will be eligible.

"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, executive vice president of Fannie Mae's Single Family Mortgage Business, says in a written statement.

"The state's condo market has been particularly hard hit by the housing downturn and we're working with the industry and our partners to do all we can to stabilize the market and help spur recovery," she says.

In the Bay area, which saw a condo boom in recent years, real estate professionals hope Fannie Mae's change will boost sales.

Jane Floyd, a Tampa mortgage broker with Diversified Home Mortgage, said she has had numerous clients, especially first-time home buyers, fail to qualify to buy condos.

"I can still do condo loans, but with 25 percent down," she said. "A lot of people don't have 25 percent down right now."

Fannie Mae workers are traveling the state, reviewing condo projects on a case-by-case basis. Fifty-one projects, mostly in South Florida, have been approved. Amy Bonitatibus, another Fannie Mae spokeswoman, said Tampa will get its turn soon.

Under regulations enacted in March, Fannie Mae has been rejecting any mortgage for a condo buyer if more than 15 percent of the development's other owners are delinquent on association fees.

Also, it would only guarantee mortgages in new converted condo developments if 70 percent of the units were sold or under contract.

Many Tampa area condos were purchased by investors during the housing boom, and real estate professionals say the market is flooded. When interested buyers can't get financing, some let their condos slip into foreclosure.

"I think this could be a big help," Floyd said. "I just hope they get to Tampa soon."