According to this recent post from Real Estate Bloggers, conventional conforming loans (Fannie Mae and Freddie Mac) on Condo purchases are requiring a 30% down payment. That’s a heck of a lot of money, and certainly does not help the sluggish condo market.
On the other hand, if developers take the the necessary steps to get their units to qualify for FHA financing, the down payment is 3.5% – a more than dramatic difference in cash outlay to make the purchase. Condo re-sales can also go FHA, and it behooves Condo Owner Associations and individual owners to look into FHA requirements on the front end. Of course, there is a limit on FHA loan amounts -in Memphis, $271,050, but that still buys a pretty good unit in this market.
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