Legal Question in Real Estate Law in New Jersey
New Condo Projects
The preferred lendor on a new construction condo project told me that the project is not ''Fannie Mae'' or ''Freddie Mac'' approved (1028). What does this mean to me, the potential buyer? Is this typical for new condo construction?
1 Answer from Attorneys
Re: New Condo Projects
Mortgages, unless they are held in the original lender's "portfolio", i.e. kept by the lender, are often sold either alone or as part of several/many mortgages to investors.
It means that a mortgage lender will not be able to sell the mortgage to another investor under any Fannie Mae or Freddie Mac programs. Those two are the main market for selling mortgages.
It may make it either more difficult or more expensive for you to get mortgage financing for this purchase, and, when you sell the property, unless the mortgage documents have been changed to conform to Fannie Mae and/or Freddie Mac requirements, your buyer will have the same problem in getting a mortgage loan.
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