Pinetop White Mountain Blog

Good Morning before Christmas Eve Everyone!

As the title of this post indicates if you are considering Buying or Selling a Condo be very cautious about it.  Most major lenders have classified any condo in a resort area (near water, sand, or snow) as Condotels.  Most have determined that if they are near any kind of resort area they are used primarily as vacation or vacation rental properties and they will not underwrite loans on them.

I know is sound ridiculous but B of A and GMAC have stopped lending on them at all and Wells Fargo will only lend on them if they are sold unfurnished. 

Add the fact that because of the foreclosure market many Condo Homeowner's Associations are short of funds and that adds another complication to the mix.  If an HOA's reserves are below 55% the whole complex is being blackballed by the lending community.

In the Pinetop, Lakeside, & Show Low areas this means most of the Condo complexes are no longer available for financing except through private lenders or seller carry options.  Most complexes here are used as income properties even if the owners use them part of the year.  The lenders are doing a google & yahoo search for vacation rentals when they are presented with a loan for approval and if they find even one unit in a complex on a For Rent site, they won't even send it further for consideration.

Condos are being classified as being in the same category for likely to default as manufacture housing which was blackballed by most lenders over a year ago.

The bottom line is that if you are considering a purchase of a unit in a complex, make sure it is classified as a Townhouse, not a Condo, or consider a Single Family Residence instead.  A small cabin is much more likely to be looked on favorably by a lender than a Condo.  There may even be some question about Townhouses but the information I have received thus far does not seem to include Townhouses in the same class as Condos.

Not the best news but important news for my readers.  Hope this helps give you some guidance in your searches.

Thanks for reading, until next time....

Sandra Paulow, Associate Broker, GRI, SFR, REALTOR® (928) 242-0300.