Feds Won’t Back Loans at Massive Condo Development
Date Posted: June 6, 2024
Posted In: News,
From St. Louis Business Journal: Buying or selling a unit in one of St. Louis’ largest condominium communities has turned into “a nightmare” after uncertainty over long-term maintenance issues has prompted lenders to take a cautious approach to home loans there.
Meanwhile, existing homeowners at the 1,425-unit Brentwood Forest condos in Brentwood are paying 200% more per month in assessments after the community’s annual insurance premium increased by more than $1 million.
“It’s a nightmare,” said Mark Gellman, a real estate agent on the Gellman Team with eXp Realty. “No lender wants to take a risk on it.”
Lending requirements and approval for condominiums have garnered increased attention following the 2021 collapse of a condo building in Surfside, Florida, that caused 98 deaths and stemmed from deferred maintenance at the facility. Fannie Mae and Freddie Mac, the government-backed entities that buy mortgages from loan originators, in 2022 issued new guidelines saying they wouldn’t acquire loans for condominiums that have significant deferred maintenance.
“Lending on condos is tough right now,” said Gellman.
The Brentwood Forest Condominium Association (BCFA), based at 1401 Thrush Place, said in a provided statement it’s “working diligently to address reported mortgage lending issues,” while also moving forward with repairs needed to fix structural concerns at the complex, located southwest of the intersection of Interstate 64 and Brentwood Boulevard. BCFA is led by board president Bill Reck, whose term runs until June 2024.