I read this on a local Shelburne Vermont forum this morning:
Thought I would pass this one on to anyone in a “Townhouse or Condo Association”! We just found out that Fannie Mae and Freddie Max passed new laws last fall which affect anyone in a condo situation. If anyone in the association owns more than 10% of the property, as in our situation one person owns two units, then no one in the association can get a refinancing with a FIXED interest rate, you can only get a variable rate. Also if you try to sell your unit, the new buyer can only get a variable rate and not a fixed rate of interest. Also if a certain percentage of the units are in default or files for bankruptcy again it affects EVERYONE in the complex and you may be turned down if you try to refinance or get a loan. This could make a big difference if you try to sell because most people want a FIXED interest rate and could turn people away from buying your place!! Has anyone else run into this problem…and if so did you find a way around it??? If so please let me know??
I’ll need to ask some of the local lenders if this is indeed correct. If correct, it will certainly hurt owners of smaller condo developments in the Burlington area.