Maryland REALTORS® CEO, Chuck Kasky is joined by Richard Green, Branch Manager and Vice President of Presidential Bank Mortgage. Richard is also a member of the Howard Country Association of REALTORS®, is the current co-chair of the Legislative Committee for the Mortgage Bankers, and has a 46-year career in the mortgage industry.
Listen as Richard provides tips and offers his expertise to clarify some of the new rules and regulations surrounding condominium lending practices. The new rules are intended to address the concerns of consumers and lenders in regards to aging infrastructure and potential risks buildings may pose due to lack of maintenance.
House Bill 107
Requiring the governing body of certain cooperative housing corporations, condominiums, or homeowners associations to have a reserve study conducted of the common elements of the cooperative housing corporation, condominium, or homeowners association and to update the study every 5 years; imposing certain requirements relating to the annual budget of a cooperative housing corporation, condominium, or homeowners association; etc.
Maryland REALTORS® CEO, Chuck Kasky is joined by Richard Green, Branch Manager and Vice President of Presidential Bank Mortgage. Richard is also a member of the Howard Country Association of REALTORS®, is the current co-chair of the Legislative Committee for the Mortgage Bankers, and has a 46-year career in the mortgage industry.
Listen as Richard provides tips and offers his expertise to clarify some of the new rules and regulations surrounding condominium lending practices. The new rules are intended to address the concerns of consumers and lenders in regards to aging infrastructure and potential risks buildings may pose due to lack of maintenance.
House Bill 107
Requiring the governing body of certain cooperative housing corporations, condominiums, or homeowners associations to have a reserve study conducted of the common elements of the cooperative housing corporation, condominium, or homeowners association and to update the study every 5 years; imposing certain requirements relating to the annual budget of a cooperative housing corporation, condominium, or homeowners association; etc.
New rules rolled out earlier this year by Fannie Mae and Freddie Mac are creating bottlenecks in the market for those seeking to buy or sell condominiums or co-op apartments. The new rules are intended to address concerns about aging building infrastructure in the wake of the collapse of the champagne towers, south condominium in Surfside, Florida last year to protect buyers and lenders, the rules ask condo and co-op boards to disclose any known, significant deferred maintenance issues that may impact the safety and structural integrity of the building and the financial plans for addressing them. According to Fannie Mae, the most visible piece of the increased oversight is new paperwork. Fannie Mae's new eight page form asks among other questions. Quote, when was the last building inspection by a licensed architect, licensed engineer or any other building inspector, but many condo and co-op associations are refusing to fill out the form, which is preventing buyers and sellers from closing deals. Hello, I'm Chuck Caskey, Maryland realtors, CEO, and you're listening to get real estate, the Maryland realtors podcast to help us understand the new rules and to provide some practical tips on how to assist buyers and sellers who may be caught in the bottleneck. I'm pleased to be joined by rich green vice president and branch manager with presidential bank mortgage. Rich has also have been a real estate licensee since 1974, a member of the Howard county association of realtors for nearly 40 years and affiliate of the year in 2016 and 2018 and an active participant on the H car legislative committee. He is celebrating 46 years in the mortgage business and among other things was 2015 president of the Maryland mortgage bankers and brokers association, 2016 mortgage banker of the year and current co-chair of the legislative committee for the mortgage bankers. Rich, welcome to the program.
Speaker 2:Thanks Chuck. That's so that's, that's more than I ever imagined.
Speaker 1:I had to cut some stuff out you've been around. Yeah.
Speaker 2:I'm telling you
Speaker 1:You've been around and
Speaker 2:Uh, it's been a long, great run.
Speaker 1:Yeah. Right. It's been a great run. Yeah. We appreciate all, all that you've done over the years for the associations and your volunteering of your time in, in, you know, to help realtors that get through the financing maze. So welcome again, then. Thanks for, thanks for coming. So let's start, I guess, at the beginning, right? So we had this condo collapse, almost a hundred people died then, you know, stories started coming out, right. We started hearing about all these other buildings that, that were potentially dangerous and more importantly, and I think really frightening how many buildings are out there that we don't know the condition of. And, and, and that's really frightening. And so obviously Florida is in the Miami area, but Florida in general, you know, the condo capital of the world. So of course a lot of these things are happening in Florida, but they're happening elsewhere as well. And not only federal regulations, but there are a lot of state rules coming into play and even local ones and Miami has its own Florida has its own. Um, maybe in addition to the, the lending rules, Fannie and Freddie VA and, and FHA. So, well, let's just start there. First of all, let's give people an understanding. I think I outlined the why and a little bit of the what, but really what's, what's involved in the new cert. It used to be the certification, right? So remember that happened a few years ago where condos have to be, had to be certified. And a lot of the same stuff was in there in terms of reserve amounts and number of, of investor owned properties. Remember those rules all came out. Right. But I think we worked our way through those, if I'm not mistaken. And, and maybe just talk a little bit about that. And then on top of all that, what do these new rules actually do? What are they asking condo and, and co-op boards to do, and then we'll get into why sometimes that's not happening. So give us a little bit of specifics what's in that new form, what are they asked to do? And then maybe a little bit about why?
Speaker 2:Okay, well, let me start with, you know, the condo approval process for loans that lenders intend to sell to Fannie Mae or Freddie Mac has been there in place for years, right? And it became a little bit of looser over time, but basically if a borrower is coming in and this isn't, this is regarding a borrower's down payment. If a borrower comes in with a 10% down, they can get, what's known as a limited review. And a limited review only asks for a handful of questions. We do get the budget, but we don't go through what was a 25 or a 30 question, uh, questionnaire in, in order to, uh, to get the, uh, the condo approved. If somebody's putting less than that down, anything less than that down, they're gonna have to do the, lender's gonna have to do a full review. Okay. And that full review is old school, basically with the same form that we always had in addition to the addendum, which now everyone has to fill out regardless of, of what their down payment is. And that form, uh, that form addresses things like, uh, the inspections, you know, when, when was the last one and I, I have, uh, let's see here, the, when was the last building inspection by an architect or an engineer, were there any findings, were there any significant repairs, uh, that have to be completed? And, and this is a form that, you know, took everybody, uh, in, in the industry by surprise. Yeah, because it's filled out by the associations, the lenders weren't surprised, but the, the associations have to fill this out and or they sub it out to vendors. And there's a couple of large ones that the larger management companies or condos have. And there's been reluctance actually in the beginning, there was complete reluctance. This started January one for Fannie Mae and February 28th for Freddie Mac. Okay. And initially nobody had the answers. They didn't want to fill'em out. They didn't wanna be accountable. Yeah. And, or they didn't know, or they said they didn't know. I would say that it's gotten better over time that we're getting more questionnaires being filled out, however, they're leaving blanks. And oftentimes the, the, the last building inspection is left blank or NA or things like that, that leaves the lender in a spot where they can't ignore it. They've gotta get the answers. How do you get the answers when, you know, the association who very much should have this information is just not, not providing it. So where the, you know, lender discretion comes in and we have been, uh, we've have been in conversation with Fannie Mae, with Freddie Mac. We've been in conversation with institutional investors that we sell loans to that ultimately then get sold to Fannie Mae. Right. For, for, for guidance. And it's hard to come by. It's been really hard to come by. Oh, is that right? Oh, okay. Yeah. It's, you know, they they've put out Q and as, but for the most part, they've laid it back on the lender and say, do your due diligence. Wow. Okay. What does that mean?<laugh> well, that's, that's why, you know, we're, we're getting the pushback and having the problems yeah. In, in the whole system and our company. And, and we have, I don't know the number that we've seen, but, um, we've figured out a way with a cooperation of others involved to get information we need, where do we get that we can actually go to the board of directors mm-hmm<affirmative> of a condo association and request the minutes of the meetings. Okay. And it's suggested that we get like six months worth of, of minutes. Mm-hmm<affirmative> to see what they're talking about, you know, this Florida disaster, it became known after the fact that they were aware that there was issue. Right. And that's scary. Yeah. But, but they were aware of it and didn't do any chose not to do anything about it. Yeah. You know, part financially part, not wanting to get the word out there, you know, which could ultimately devalue the, you know, the individual units and, and by, and so doing it, you know, you saw the end result, the building collapsed.
Speaker 1:Yeah. Yeah. I was gonna ask you about that specifically, cuz there is a question right about deferred maintenance and to me not to get hyper technical or even legal, but we would call that an, an admission against interest. You know, you tell yourself in legal terms, if you admit that you knew something and didn't do anything about it that ended up causing damage to somebody or something that, that you have documented your potential liability. And the first time I read that question, I thought, well, no wonder nobody wants to fill that out because all they're doing is setting themselves up for potential liability, knowing that we, you know, now that they've admitted that they knew about it and didn't fig do anything about it. There's potential liability. There is that, is that your take on it?
Speaker 2:Absolutely positively. Yeah. And I, you know, that's been a rock in the path of, of getting what we need, but you know, we are going back and, and asking for this kind of information you can, and none of myself or any of our underwriters are experts in, you know, uh, county codes and things like that. But sometimes you can find out some of that information, uh, you know, Google's a big tool<laugh> and if, you know, you can find out sometimes more than you ever wanted to know, but in an effort to, to get the, the answers that we hope we're gonna get. Yeah. Um, we can look to see if there are any violations, you know, if they've been cited or, or whatever, and, and utilize that information, hopefully in a positive way. Right. Understand, you know, we wanna make loans. Okay. But at the same time, we're accountable to Fannie Mae and Freddie Mac when we make a loan and whether we sell it directly to them or whether we sell it to an aggregator or, or an investor who winds up selling it to them, we make representations and warranties.
Speaker 1:Right.
Speaker 2:Okay. Reps and warranties. And that is that that's our accountability puts us on the hook. Okay. And so we have to do it right. But our underwriters have really been, I think, interested in doing everything they can. So they're suggesting, you know, county websites, Google, anything we might find out, you know, from the HOA minutes, the budget looking at the budget.
Speaker 1:Right.
Speaker 2:You know, do they already, they, they need to have it at least 10%.
Speaker 1:10%. Yeah. That's the other question that would, and the other questions on the form, but yeah. Let's start with that,
Speaker 2:You know, but then that's not a new rule.
Speaker 1:That's fair. No, that's what I was gonna clarify for people. A lot of this stuff has been in existence, the percentage of investors in the building, things like that. Right. Are not new.
Speaker 2:The really, the only thing is that's new is relative to what they know about the condition of the building and, and what's been reported. And then do they have the, the funds that they were always supposed to have in place?
Speaker 1:<laugh> yeah. Right. Okay.
Speaker 2:So it's, it's, you know, from an information gathering standpoint, it's new, but in reality it's not okay. And I think, I think anybody, you know, any buyer or lender really wants to know, uh, should wanna know the condition of the building. What's interesting is, is that they, they also put this into, for any condo with five units or more so it's gonna, and, and it applies other than detached condos, which I don't know that we have many, I don't know of any around here.
Speaker 1:We actually do have a couple. And, and that's what our cottage cluster law, the bill we keep trying to get past is because the ensuring the way to ensure these they're they're smaller homes. Okay. They're structured as a condominium, but they're detached. And the insurance industry is having a hard time reconciling those. Right. And for some reason there keeps, we keep trying to get this bill passed. It's the second year in a row that the bill didn't pass. So they have figured out a way to, to do that. And that's what we, we talk about cottage cluster. That's what we, that's what we're talking about. But go ahead.
Speaker 2:Sorry. It does, it does include town homes
Speaker 1:And yeah,
Speaker 2:For sure. You know, that that is a whole different situation. Most people think well, because it's a town home. In fact, Chuck, you would be amazed at the number of people that I talk to when I say, uh, tell me a little bit about the property and you know, they say it's a townhouse. Well, is it, is it a condo? Well, no, it's a townhouse. Not, not understanding, you know, that that townhouse is a building structure and condo is a legal, legal ownership structure. It comes up a lot and sometimes it
Speaker 1:Would not surprise me by the way.<laugh> yeah.
Speaker 2:Sometimes the only clue I have is going on to look at the listing and I noticed the, the HOA fee is a little high. The condo fee is a little high. Okay. And you know, red flags go off. That's interesting. And uh, so people, people need to know what they're looking at. And this comes from both, you know, buyers that I talk to as well as agents sometimes just having gone down that, that exploratory path. But so we still have to do the same thing on town homes. I think seemingly we're a little less concerned because the idea of seeing a collapse is probably pretty slim. And, and if it does collapse, there's a building on either side, that's it? Yeah. It's not a high rise where a hundred people are gonna hit the ground and, and tragedy hits. But nevertheless, we have to go through the same process and you know, we're, so we're concerned. The items that we're really concerned about are those that are of significant nature. And I think they categorize, uh, let me, let me find that there's several different categories touched upon some are being significant and immediate others not. And, but in any case, you know, that that really drives a lot of, of what we do.
Speaker 1:No. The, one of the let's just maybe just interject a little bit, because I know that the community Association's Institute CAI, which is kind of like a trade association for condo HOA, uh, co-op boards, they send a letter asking for a delay, which obviously they did not get, but they also, one of their objections was the kind of speculative nature of, of some of the questions. For example, not only are there outstanding violations of jurisdictional requirements, safety sound, and structural integrity or habitability of the, of the buildings, but also to forecast if it's anticipated that the project will in the future have such violations. So part of me, isn't surprised by the resistance to fill out some of these forms, cuz that does sound speculative and subjective is, are you hearing some of that?
Speaker 2:The, the objections are obvious. And from an accountability standpoint, you can't predict you really can't predict the future. But one of the things that we're gonna see, and, and maybe this dovetails into this a little bit, there was a piece of legislation in Maryland house bill 1 0 7 that was in fact passed this session hasn't yet been signed by the governor, but it will be, I think it had a two thirds, majority, uh, vote. And this is regarding, uh, condos and HOAs where reserve studies are going to be a requirement, an absolute requirement. And it's already in place in Montgomery county and prince George county. And this bill extended it statewide. So beyond whatever Fannie Mae and Freddie Mac are gonna do, uh, there is going to be requirements over periods of, I think it's a five year window where they're going to have to do these studies and the criteria of who can do them. They need to be like a licensed architect or engineer and they need to have experience having done. At least I think 30 of the, of these, uh, studies before. And I, I, so this isn't gonna go away, you know, it's temporary guidelines, but I am sure legislation, like this is gonna pass all over the country because, you know, as you said, initially, some of these buildings have been standing for, you know, decades with never an inspection.
Speaker 1:Right. Right.
Speaker 2:So I, I think that this, um, I think, I think this bill is, is definitely gonna play it. It's gonna start, I think, based on when the condo was established. Right. But they're, you know, they're, they're bringing it right up to ones that are established on or after October 1, 20, 22. And um, you know, basically it's a five year mm-hmm<affirmative>, I think it's a five year requirement, so yeah. That's gonna, I, you know, that's gonna change the landscape a little bit, I think.
Speaker 1:Yeah. And I, I think it it's a function also, like you said, of some of the aging, not just our infrastructure, but you know, our buildings, everything's getting older and you know, we, they're gonna be more and more,
Speaker 2:Not just you and I
Speaker 1:Issue Touche<laugh>, nobody can see us. So it's say they can't really see how old we look right now, but uh,<laugh> Let me ask you, before we, before we, uh, get into some of the practical work arounds or, or what your advice would be for people shopping for a condo loan, cuz it is the entry point for a lot of first time buyers and a lot of our members do. And absolutely we have obviously, you know, ocean city, we have a lot of this, you know, a lot, a lot at stake here for our members. Do you personally just do, did you think they overreached, I hear a lot of this as far as the proportionality of the response to the problem, do a problem. Did, how did, do you feel about that? Did, do you think they overreached a little bit or a lot?
Speaker 2:Mm, I don't, I don't know that they, I don't know that I, I feel that way. I really, I mean, I think that this is clearly an issue yeah. From a liability standpoint and, and obviously as much as a first time home buyer or any buyer who has a condo puts into the transaction, right. The lender has even more. Yeah. Right. You know, if, if the borrower's got 20% in the, lender's got the other 80. Yeah. And, and so, um, and, and I think far a little more far reaching, um, is that there, I've heard of insurance companies that are taking a long, hard look at either no longer providing liability to the condo association, which is critical. Yeah, for sure. Um, you know, that's a requirement of Fannie Mae Freddie Mac that might that be in place, uh, let alone the, you know, the personal dwelling coverage. Right. I don't think they've gone away yet, but I think that there's, we're, we're starting to see some pushback and there's probably gonna see increase in, in premiums and cost. Okay. And that's gonna get passed through to the consumer of course, through the condo fee or otherwise. Sure. And I mean, it ju it just has to be that way. So I, I think that it would've been nice to, to have all the answers to all the questions before they put it out, but that never happens, you know, the action reaction and, and that's, that's kind of, that's kind of where, where we are on it. I think from a best practices standpoint, I think that you need, not, every lender is gonna do it the same way. That's just the fact, okay. I've heard from some that are doing nothing to follow these regs. I've heard of others that are going way beyond our position on it is, is that we want to start this review process up front. Maybe we start it when a, when an agent gets a listing. Yeah. Okay. That our underwriters are willing to look at this. And I, I think it's real important that you do that because once the contract is written, everybody's knee deep, um, you know, and, and there's cost involved and appraisals and home inspections and all this other stuff, and we may stop it at the door. Yeah. Um, hopefully not.
Speaker 1:Yeah. That actually leads me to, so let's just review real quick. So the key areas in the form, the new, which is actually an addendum, like you said to existing forms from Fannie and Freddie, any unsafe conditions, whether there's significant deferred maintenance and special assessments, either being imposed or being considered to address these concerns and to meet the 10% reserve requirements. So, right. Those are the big pieces. I think in a, to a, in a broader sense, these are self-governing bodies, you know, and I think we have to look at some of the human elements and human aspects of this in terms of they're keeping they're focused on keeping assessments low, right? Nobody wants to go say, Hey, we're, we're increasing anything. Like we have members, we're raising dues is hard and you pay, you know, we pay association memberships, and then we pay our condo and HOA fight fees. And we keep seeing them go going up and going up without immediate invisible outcomes. So there's reluctance to do that. On the other hand, also, Association's failing to recognize the structural and system failures. And so, you know, by the time it's too obvious to ignore it, it's number one too late. And number two, if they don't have the money, then they'll just make superficial or temporary repairs or post and, and postpone the real comprehensive and in depth restorations that are necessary. So I think those dynamics really can't be ignored. Number one, number two, if you wanna do the work ahead of time, which as you just mentioned, there are resources, the, the, the approval lists are out there. Right. So we, everybody should be checking these, you know, FHA VA, Fannie and Fred each have their own. Right. So there's score list at least. Right. Is that right? Or,
Speaker 2:No, not exactly. Okay. The, uh, on the conventional side, Fannie and Freddy pretty much have suspended their, their, uh, approval lists. Okay.
Speaker 1:Oh, I'm sorry. Oh, I didn't see that.
Speaker 2:Okay. And, or, yeah, they're, they're not number one. There was never that many, I went on today and went on to Fannie Mae's site, you know? Right. Cause we had one of our investors give us where to go to look for it. And page not found Paige not found
Speaker 1:Oh, no kidding. Oh, I see. I didn't
Speaker 2:Do that. I mean, they they're throwing it back to the lender to get current accountability. Okay. Okay. Okay. Now FHA B is another story. I'll get into that in a minute, but okay. The lists are just not that valuable or usable anymore. And you know, amongst all these other things, if you wait till we send an appraiser out there, they may see some things that we didn't know. Right. I mean, we don't know that, you know, we don't know the property and nobody's really telling us about that. Okay. Mm-hmm unless we, unless we get these minutes or get this questionnaire right. Or right. Et C cetera. Right. So, you know, again, the best practice is jump on it up front for everybody's benefit and, you know, okay. Hopefully your lender, whoever it may be is gonna, is gonna, you know, work with you to get this on board right away. You know, some will, some will some won't, but it's worth a try or working with somebody that will as to the special assessments. That's something usually the appraiser digs into as well. Yeah. Yeah. And you know, once we see a special assessment, we need to then start asking all the other questions, what's it for? Is it an anticipation of, or is it something that they're doing right now? And if it's health and safety, critical repairs and things like that, it's gonna have to happen. Yeah. And be complete, not just
Speaker 1:<laugh>
Speaker 2:That's important. And like you said, Chuck, nobody wants to raise fees. I mean, it affects marketability. It does to the public, you know, values and, and things like that. And, you know, Lord knows condos are a great first time home buyer entry level and, and, or downsize and or second home,
Speaker 1:Or yeah, no, it was my first home and it'll probably be my last. So, you know,<laugh>, I'm tired of, I'm tired of all the talk about deferred maintenance come to my house and wanna see deferred
Speaker 2:Mainten. Yeah. No,<laugh>
Speaker 1:<laugh> so what are the FHA and VA, are there, are there approved lists? Are they better?
Speaker 2:Yes. Yes. FHA and, and VA have lists the FHA list. You know, you, I can go to their website and, and find it. Yeah. Um, you have to, you have to be careful if you're working on a small screen to get all the way over to the right to make sure that it's not yet expired because they do list. They, they keep'em on there, but they'll have an expiration date. Okay. And beyond that, the lender has to still reconfirm the delinquency percentage, the 60 day delinquency percentage being less than, uh, 15%. And they also are looking at the percentage of, of, uh, owner occupancy. And we look at, uh, is there any litigation pending because that's a potential expense BA on the other hand, and, and this is absolutely strange, but VA has a list and VA adopted FHAs approvals years ago. And so they maintain this list. However, we have found out from VA and they have never published this. We we've got an email back from them that no, we haven't published this, that their list is I think if part of the approval, uh, ID number, uh, has an H in front of it, it's meant it came from HUD and it's no longer necessarily VA approved. And if it has a C it means something else, then it's not approved. And you ask why. Okay. Because when they went through some con computer conversion, they couldn't, they couldn't fix it.
Speaker 1:Oh, no.
Speaker 2:Yeah. I mean, it's absolutely crazy. And I think some lenders colleague of mine at another company learned the hard way.
Speaker 1:Yeah. I'm sure be
Speaker 2:Because you can't go on the web and find it. Right. But I would say that, you know, FHA becomes an alternative if it's already approved to conventional, you know, it's solid. Not everybody wants to go FHA.
Speaker 1:No, I get that. Yeah.
Speaker 2:I personally think if you've got an FHA approval that it's gonna be good for a while. It's a nice, it gives the buyer a nice exit strategy. Right. Knowing that someday they're gonna sell the, the place. Right.
Speaker 1:Yeah. So the key takeaway so far do the work ahead of time, get the buyers and, and sellers too. Right. I mean, if you're listing. Yeah. So you need to know what, because cuz it's obviously both sides of the transaction are, are impacted here. So do the homework to check the status. If it, if it is FHA VA, you could have an opportunity to, to look at the, that the list and make sure that it's approved. But they've been doing that for a while since the last round of oh yeah. You know, the certifications came up, but know the questions to ask. And I think we talked about those at the end of the day, what are some of the other alternatives? And like I mentioned before we, we started the taping. I always learned something. And so what I learned this week is non warrantable loan. So that's an option. Explain to our listeners what that is and why that might be an alternative financing.
Speaker 2:Sure. So non-war non warrantable. Condo is one that does not meet the, the status where a lender could do the reps and warranties that are required to sell to Fannie and Freddie. And it basically is a very it's out there, but it's limited and not all lenders have it. I can tell you that, you know, a lot of people will use it for condo tells they will use it for, for condos that have high percentages of either owner non-owner occupants or, you know, they, they can't pass on, on the delinquency percentages or there's too much retail in the building.
Speaker 1:That was the other thing I was gonna mention. Yeah. Too much retail.
Speaker 2:Um, the issue with it is, is that it comes with a, a fairly high cost,
Speaker 1:I would think. So
Speaker 2:Almost priced like in the days of non-traditional lending, you know? Oh yeah. Oh yeah. It's up there that much.
Speaker 1:Oh wow. I know it was high. I didn't know. It was like,
Speaker 2:I believe I haven't checked them. Yeah. Chuck, I haven't checked them lately, but I have to believe that it is that high because it's the only game in town. Hmm. It's not out there. The majority of lenders don't do'em right. They, they just don't. And so the investors who are making them many of'em are independent, you know, fan Fanny and Freddy. Yeah. They know they can get it. And so they do. And you know, there are, it's big down in areas where their condo tells. Right. You know, Carolinas and, and you
Speaker 1:Know, is that right? Okay.
Speaker 2:Beach areas and things like that. Yeah. I think we have one investor that does'em but we really have not put it out there. We probably will. As a result of, of the, the fan Fred rules now. Yeah. We, we may take a look at it. It's not a large volume product. And so that's why a lot of lenders don't want to do it. You know, you, you kind of need to do enough of them to train your people, put your systems in place, et cetera, et cetera. But it is out there. And, and so it is clearly an option for people.
Speaker 1:Good.
Speaker 2:But, but you will pay, you know, one of the
Speaker 1:One way or the other
Speaker 2:<laugh> you? Yeah. One of the, one of the other things is people and, and often, you know, they sort of challenge you on, on your condo rates, condo rates for good solid condominiums are far more expensive rate wise than a, a townhouse or a single family home significantly, anywhere between a point and a point and a half more, which rate equivalent wise could be at least a quarter percent more on rate. Um, you avoid that when you put 25% down, you avoid, oh, put five. Oh, okay. Yeah. Well you avoid some of it at 20 mm-hmm<affirmative> to avoid virtually all of it at 25, but below 20, it gets ex significantly more expensive to finance a condominium through Fannie Mae and Freddie Mac. They impose what they call loan level price adjustments in our industry known as LPAs. Okay. Okay. And it's because the risk of a condo forget all of, of what we're talking about here today. This has been in place for some time.
Speaker 1:Yeah.
Speaker 2:And kind of
Speaker 1:Makes sense.
Speaker 2:Yeah. Yeah. But when you talk to a consumer, you know, they don't understand that, you know, you're trying to, you know, they're trying to buy, you're trying to sell a condominium. Right? Why do I have to pay more? Right. And you don't, you gotta be careful going down that path because you don't wanna scare'em away, but you, you need to make'em aware.
Speaker 1:Well, rich, that's all we have time for today. Again. Thanks for joining us. Really do appreciate. That was great information. Thank you so much. We try to pack a lot of information in a relatively short amount of time. And that was, that was one of the most substantive ones we've had. So I really do appreciate it. So thanks again to rich green and to our listeners. Thank you for the privilege of your time. This is get real estate, the Maryland realtors podcast. I'm Chuck Caskey, Maryland realtors, CEO. And thanks as always to our esteemed producer, Joshua Woodson, please subscribe wherever you get your podcasts like us, share us, give us five stars. If we've earned them. And most importantly, give us feedback, including guests you'd like us to invite or topics to explore In leaving, be kind, stay safe. And if you know me, or even if you do, if you do know me, you might not even know this, but I love winning the poop. And he's offered so many true and undeniable truths over, over the course of time. For me, including people say nothing is impossible, but I do nothing every day.