Condo Loan Problems

I recently became aware that it is very difficult to acquire a loan for a condominium purchase when more than 30% of the units in the condo complex are rented, rather than owner-occupied.

Banks and savings & loans are reluctant to offer loans in such a situation because Freddie Mac and Fannie Mae will not buy these loans in the secondary market. I would imagine that a fairly high percentage of condo complexes in Southern California have a rental rate in excess of 30%.

As result, many condo owners are finding it difficult to sell their units. Many of the condo owners who find themselves in this unfortunate position were never aware of the 30% rental restriction imposed by most lenders. Perhaps this is related to the fickle nature of lender criteria, but the situation appears to be a well-kept secret.

ROGER A. EVANS

Redondo Beach