CONDO RULE CHANGE ⚠️ AGENTS MUST KNOW THIS!

Welcome to my Monday Market Update for 
the week of August 18th with Nikki 
Erickson from Kevnik Mortgage!

This week we have a major rule change 
every real estate agent needs to know 
about right now — plus a simple and 
brilliant idea to stay top of mind 
with your sphere this week without 
pitching real estate at all.

This week we are covering:
✅ Back to school slowdown — what 
   to expect in applications and 
   activity over the next few weeks
✅ Interest rate update — mid to 
   high sixes and what the Fed 
   is signaling for the fall
✅ MAJOR CHANGE effective August 3rd — 
   Fannie and Freddie have eliminated 
   streamlined condo approvals entirely
✅ Every condo now requires full review 
   regardless of down payment — what 
   that means for your transactions
✅ The fast track approval — how to 
   use the existing database if your 
   condo project is already registered
✅ The four things the full review 
   will examine — investment property 
   percentage single owner percentage 
   reserve fund requirements and 
   insurance
✅ Townhomes do NOT need a condo 
   review — here is how to tell 
   the difference every time
✅ How to check legal descriptions 
   to identify condo vs townhome 
   in any state
✅ The back to school supply drive — 
   a simple community touchpoint 
   that keeps you top of mind 
   without mentioning real estate

If you have any condo transactions 
in your pipeline right now — under 
contract or not — reach out to 
Nikki immediately.

This change went into effect August 3rd 
for closings — not applications. That 
means deals already in progress could 
be affected.

This is the kind of information nobody 
teaches real estate agents. And knowing 
it will make you a better advocate for 
your clients and a more professional 
agent in every single transaction.

Need a Great Real Estate Coach and Mentor....
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📞 Connect with Nikki Erickson at Kevnik Mortgage:
📱 Call or Text: 952-484-1584
📧 Email: nikki@kevnikgroup.com
📘 Facebook | TikTok | Instagram: 
   @mortgagesfrommntoaz

00:00 Introduction – Market Update 
      Week of August 18th
00:30 Back to School Slowdown – What 
      to Expect in the Market Right Now
01:30 Interest Rate Update – Mid to 
      High Sixes and What Is Coming
02:30 MAJOR CHANGE – Fannie and Freddie 
      Eliminate Streamlined Condo Approvals
04:00 Full Review Required – What That 
      Means for Every Condo Transaction
05:30 Fast Track Approval – How to Use 
      the Existing Database
06:30 Condo vs Townhome – How to Tell 
      the Difference Every Time
07:30 Back to School Supply Drive – 
      A Simple Way to Stay Top of Mind
08:30 How to Reach Nikki Erickson

#realestate #lender  #mortgagerates

Transcript

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SPEAKER_01 0:35

All right. It is the week of August 16th. Nikki, what do you got for us? Well, it's almost back to school time. So, of course, in the mortgage industry and some most of the time in the real estate industry, that means we have a slowdown of loan applications that are coming in the door, which I have absolutely noticed over the past uh week or so. So we're hoping that once school gets started and people can kind of get things um settled down, that we'll see a little uptick in the fall with interest rates into the mid to high sixes still. Um, you know, we're kind of just even keel, kind of going, you know, staying where we're at. And yeah, there's a little volatility in the market, but nothing to be too concerned about. Um, hoping we can get those interest rates pushed back down. Um, there was kind of uh um some pieces, news pieces that came out um all throughout last week talking about the probability or the the implication that we could see the Fed raise the interest rate in the fall, but they have all said and everything said, you know, no, that's not gonna happen. We're still gonna keep it status quo throughout the fall and hopefully through the end of the year. So that is good news. Um on to more interesting news from a real estate perspective. We have talked about this time and time again, over and over and over again, is condo approvals and condo approval projects. But I wanted to make note that Fannie and Freddie just did away with their streamlined or limited documentation um approval for condos. So that means that every single condo project now has to go through the full approval project, regardless of down payment. Used to be that you could get what's called a limited or a streamlined review if you put 10% or more down on the condo. They have absolutely done away with those. Um the big difference being that when you did a streamline or a limited review, they only specifically asked questions about um the condo project, not necessarily about the budget reserves, you know, things of that nature that can affect lending. And so it was a nice way for clients to be able to still purchase the condo with eyes wide open, but not have to go through such a rigorous approval process for um their condos for the lending side. That is all done away with. Instead, I know you remember me talking about this, but the database for registered approved condos is still out there for Fannie and Freddie. If you have a project that is on that database and is already showing as approval or has already gone through the approval process, you can do what's called a fast track approval. What the fast track approval does is it just basically says, hey, this was approved before, and depending on how long ago it went through and was registered on that site, you may have not have to be as rigorous about gathering new documentation, et cetera, for that reapproval. If it has not gone through that process, you need a full lender questionnaire, you need to get your appraisal done, you need the insurance requirements, you need to have the roof coverage, all those things that we talk about from a condo approval project standpoint, you need to have those in place before you can lend on that property. So the full review is gonna go talk about how many properties are investment properties versus primary or secondary homes. If the pro if the percentage over 25% are investment properties, we're gonna have a little bit of a lending issue. We're gonna require more of a down payment and have eyes wide open from the borrower. The other thing it's gonna talk about is one single person or one single entity owning more than a certain percentage of the individual condo units to a single owner. Again, that can't be more than 25%. Um also the full documentation requires a 10% reserve fund. So 10% of the budget needs to be in a reserve requirement. If it does not meet that 10% reserve, done. Unless there is something in place to make up for that 10% within the first 12 months, we're kind of you know not going to be able to lend on a traditional basis. And that comes from conventional FHA, VA, et cetera. Um, also, reminder on the insurance, all apparels that are required need to be under replacement costs except for roof. Roof can either be replacement or actual cost coverage. Um, but other than that, um, yeah, other than that, those are just some things that are happening now with these condos. And as we continue lending and as we continue pushing things forward on them, note that if you have a client that is looking for a condo or you have a client that wants to list their condo, guess who's a good resource for you to check on condo approval requirements?

unknown 5:02

Yes.

SPEAKER_01 5:03

Should be your lender that you uh depend on, who you partner with matters. Angie says it all the time. So um, those are things. In fact, I just did one um last week for a realtor that sends me a lot of business or that I have a really good relationship with. I just went through her clients' um condos, um budgets and reserve studies and all that stuff just to kind of give an eye on hey, this is what I would be asking about, this is what I would um, you know, think about with from a review standpoint. And ironically speaking, as a reminder, town homes, actual town homes, do not need to have a review done, only condos. So this happened to be for a client who was purchasing a townhome, but the realtor thought it was imperative to still check with me and still say, hey, here's the documentation, here's the budget stuff, what are some red flags? What are some questions they need to be asking? So that was a really good reminder, et cetera. As these changes are coming down with Fanny and Freddie, they went into effect August 3rd. Um, so we are under the new changes right now for anyone that wants to purchase a condo. Yeah.

SPEAKER_00 6:04

If you're already under contract, does that still apply? It does. Okay.

SPEAKER_01 6:09

Yeah. It closings after August 3rd. Got it. Closing. Not applications.

unknown 6:14

Got it.

SPEAKER_00 6:15

Good. All right. And then um, can you remind us? I know you had talked about this a few calls back, the difference in how you can tell the difference between a condo and a townhome.

SPEAKER_01 6:24

Sure. In a lot of states, it's very easy from a legal description standpoint. A townhome will have a lot and block in the legal description, whereas a condo will have a CIC number or common interest community, or it'll just say condominium. Um, in other states, such as Arizona, it's a little bit more difficult to tell. You can contact your county or your city to see how it is, um, whether it's considered a condo or a townhome. But most of the time in in states like Arizona, it is going to be a condo. It's very rare that we have a townhome here. And just a reminder, the difference between the two is the ownership of the land and how that's divided up with from an association standpoint.

SPEAKER_00 7:02

Yeah, perfect.

SPEAKER_01 7:03

And common elements, I should say.

SPEAKER_00 7:05

Yeah. Got it. Well, and I will just say if any of you out there have issues that arise or come up because of this change, please reach out to Nikki. Yes. I mean, she we had a buyer on one of my listings, and I knew better, and I've talked about it here. Uh, but we went over a month past closing, and then they finally just said, nope, done, not gonna happen. And I was just like, Oh, and they were under contract my sellers for new new construction uh to move that way. And Nikki came in and got it done. Um yes, unbelievable, amazing. So, even I mean, in any situation, in any transaction, definitely seek her out. Uh, but especially with this new rule change, and I just have a feeling some people are gonna be affected that have no idea it's even coming down the pipeline. Yeah. So how do they get a hold of you? Sure.

SPEAKER_01 8:06

You can get a hold of me on TikTok, Instagram, or Facebook at mortgages from MN to A Z, or you can text or call me at 952-484-1584, or you can email me at Nikki at Kevnik Group.com.

SPEAKER_00 8:18

Perfect. And I encourage you agents, I know that I had a couple agents do this in the past. Nikki mentioned it's back to school. School supplies is a major thing in every community in every state across the country. Um, so what you can do if you want to is just do a you know, impromptu school drive. Email out your past clients in your sphere of influence, offer to pick it up or get a list of people together who you are are closer to in proximity. Um, drop a bag off and just say, as you're shopping over the next week or two, just grab some supplies, put it in this bag, set it out front, and I'll pick it up on you know August 28th or whatever day it is, so that you can really um show up for your community and help out some kids that need school supplies and come from contribution. Again, it reminds everyone what you do when you're emailing out and it's your email signature. You don't even have to bring up real estate, uh, but this is a really good opportunity to show up for your community uh and make it easy for them to do so. Just pick up stuff and I'll pick it up from you. So beautiful. Or you can find local schools just to donate to, just a reminder out there. I know I have four schools within two miles of me that I'm sure if I dropped off at the office, they'd be more than happy to accept it. So just a note as we're headed back to school.

SPEAKER_01 9:43

Yeah, absolutely.

SPEAKER_00 9:44

Good. All right, Nikki. Well, as always, thank you so much, and we'll see you all next week. Bye, everyone. Bye.