Fannie Mae blacklists 685 California condo complexes

Many first-time homebuyers in Southern California are facing challenges in the condo market this spring. Inventory has increased significantly, but prices are still very high. Interest rates remain elevated, leading to tough competition for desirable properties. According to reports, the number of condo listings in Southern California has risen by over 60% since last year. This includes increases in all counties, with Orange County seeing 1,284 listings, up from 792. Despite the larger inventory, sales numbers have been mixed, with some counties experiencing drops in sales volume. Renting versus owning is also a significant concern. Renters can receive a tax deduction, but they miss out on property appreciation. In Orange County, the median condo sales price jumped from $633,000 in February 2023 to $710,000 this year, reflecting a substantial appreciation for owners. One major problem for buyers is Fannie Mae's blacklist, which includes 438 condo complexes in Southern California. This list limits financing options for buyers. If a condo does not meet certain standards, it cannot qualify for government-backed loans, making it harder to purchase. Buyers are advised to check if a condo is on the blacklist before making any offers. Nationwide, about 5,191 condos are affected by this blacklist. This represents a small fraction of all condo complexes. Buyers are encouraged to consult mortgage professionals to ensure their desired properties meet financing standards. For those worried about blacklisted condos, purchasing planned unit developments (PUDs) might be a better option. PUDs are treated like single-family homes and avoid many of the restrictions associated with condos. Additionally, condos can later be added to the blacklist, so buyers should consider this risk when making their plans.