New Penn Financial offers condo loans outside GSE limits
New Penn Financial has launched a condo loan program that features more flexible property restrictions than what's allowed under Fannie Mae and Freddie Mac guidelines.
The move comes amid tight housing inventory and rising home prices that are making the condo market more attractive for consumers.
"The SmartCondo, like our other Smart Series products, reflects our commitment to providing a variety of unique and responsible financing solutions to meet specific consumer needs," Keith Jones, vice president of credit policy and investor relations at New Penn Financial, said in a press release. "The SmartCondo program gives borrowers an advantage in financing options for the purchase or refinance of their condominium under various scenarios."
The new loan permits up to two exceptions to the government-sponsored enterprises' underwriting rules for condos.
Exceptions to GSE underwriting include a higher portion of commercial space and reduced presale requirements. The new loan also offers increased flexibility in underwriting guidelines like homeowners' association replacement reserves and single-entity ownership.
Fannie and Freddie also have recently loosened their requirements for condominium and cooperative financing.
Fannie, for example, is increasing the percentage a single-entity can own in the smaller cooperative market to 20% from 10%. The change brings this limit in line with a similar change to condo requirements made earlier this year.
Freddie and Fannie also earlier this year extended appraisal waivers previously only available for single-family homes to the condo market.
The condo and co-op market accounts for 11% of existing homes sales, according to the National Association of Realtors.