Fannie And Freddie's Caving On Standards Has Officially Begun (NYC Condo Salvation Coming Soon)

Fannie Mae

Photo: AP

This morning we wrote about some risks to the NYC real estate market, which include: the Treasury selloff, the end of Fed mortgage buying, and the fact that Fannie Mae has been very strict about condo financing in NYC, unlike in the past.But we concluded with a prediction that the standoff between NYC financing and Fannie (FNM) would give way:

…our guess is that Fannie will cave in some manner eventually. If rates surge, and the New York housing market is really held back (despite a solidly recovery), expect them to find a way.

Well… that may happen sooner rather than later.

According to the AP (via @breakingnews), Fannie Mae’s corporate cousin Freddie Mac is to drop strict rules that were preventing financing for many Florida condos.

The situation is a bit different than in NYC. In Florida the problem was that troubled condo units could not obtain financing. In NYC the issue is that many buildings violate certain rules, such as injunctions against condo financing when one owner owns more than 10% of a building.

But this is certainly good news for New York.

Bear in mind that when we say “good news” we mean purely from the perspective of those with a vested interest in seein the real estate market strengthen. We do not mean good as in “good for the country” or “good for the economy” or anything else that would actually be subjective.

The loosening move in Florida is a sign that the agencies will make changes on a regional basis when their rules (rules designed to prevent bubbles, but whatever) get in the way.

Relief to NYC coming soon!

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