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Thinking of buying a condo?  Things might have just got tougher, according to an article that appeared in the Seattle Times on Saturday.  This is something to keep in mind:

 Starting May 1st, 2008, for example, the lender United Guarantee has chosen to ban loans in hundreds of zip-codes that have been labeled as “declining” markets regardless of an applicant’s resources or credit score.    Also, several large lenders including Fannie Mae and Freddie Mac, as well as some privately owned mortgage insurers will be tightening up the requirements to qualify for a loan.  This has been explained as necessary due to such things as weak sales and diminishing property values. 

Some lenders have decided to only agree to cover a fixed percentage of units per condo project, in order to minimize risk of loss.  Thus, if there are already a certain percent of loans in the complex, if the lender is approached for another loan in the same building, the applicant will probably be turned down.

Most loans will now require at least a 10% down payment, whereas buyers willing to put 20% down upfront should not be affected by these new policies.

Read the Seattle Times article: A condo loan or refinancing soon will be tougher 

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