Managing Director at CHARLESGATE, Michael DiMella, recently sat down with Rosella Campion from Loan Depot to discuss the new regulations.
New Lending Guidelines for Condos:
Based on the new lending guidelines, it will become a lot more difficult to sell a condo without the following items:
- A Certificate of Occupancy - new construction is required to be signed off on by local building departments prior to occupancy. There will no longer be any exceptions allowed by lenders.
- Major lending companies will no longer be allowing deferred maintenance or a seller to pay a special assessment at closing. Sellers will still be allowed to pay in advance if the special assessment is not deferred maintenance, safety or affecting the habitability of the unit.
- Must have 1 million liability insurance. No blanket insurance policies will be allowed for multiple buildings within an association.
- It is required that 10% of the Associations Income must be allocated for Capital Improvements. An engineering study is no longer enough and the association will still require 10% in reserves. Looking ahead: It is also expected that a separate line item for general maintenance will be required.
- Appraisers will be required to comment on the condition of the building. They will specifically be looking for unsafe, unstable items or anything causing direct damage to units. Meeting minutes may be reviewed, specifically looking for any deferred maintenance items.
- There must not be any current lawsuits against the developer for construction defects.
Advice for Condo Owners:
With these new guidelines, it may seem overwhelming to think about managing your condominium or possibly selling it. We've put together the following recommendations to make sure you are prepared:
- Give yourself extra time to get your property ready to sell
- Address any property and condo association deficiencies
- Speak to a knowlegable Boston real estate agent to learn more about any new or current regulations and how you can best prepare
- Download this Condo Questionnaire and make sure to review it prior to meeting with your real estate agent
Thinking of selling your condo this year?
Ask us for a free condo association assessment to make sure your condo meets all required lending guidelines.
Rosella Campion and her team at Loan Depot is happy to have a conversation as well: