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Atlanta Market Review 2009: Condo Approval & Financing Changes

This annual Atlanta market review explores the absorption, sales prices, foreclosures, and current inventory of condos in the area. It also discusses the changes in condo approval and financing standards in a changing environment. Learn about the governing factors, GSE policies, and mortgage insurance companies' requirements. Stay informed to make proactive decisions in the Atlanta real estate market.

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Atlanta Market Review 2009: Condo Approval & Financing Changes

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  1. THE DEVELOPMENT ADVISOR 2009 ANNUAL ATLANTA MARKET REVIEW

  2. ABSORPTION

  3. ABSORPTION

  4. SALES PRICE

  5. SALES PRICE

  6. SALES PRICE

  7. FORECLOSURES – NEW CONSTRUCTION

  8. FORECLOSURES – RESALE

  9. CURRENT INVENTORY

  10. CURRENT INVENTORY

  11. PERMITS – SINGLE FAMILY SINGLE FAMILY PERMITS – 2006 – 4Q09

  12. PERMITS – MULTI-FAMILY MULTI-FAMILY PERMITS – 2006 – 4Q09

  13. THE DEVELOPMENT ADVISOR 2009 ANNUAL ATLANTA MARKET REVIEW

  14. Condominium Approval and Consumer Financing in a Changing Environment Dave Nielsen National Condominium Sales Manager City Club Buckhead February 25, 2010

  15. Condominium Project Approval Standards • Governing Factors • GSE Policy • MI Policy • Lender Policy • Government Sponsored Enterprises • FNMA • FHLMC • FHA • VA • Mortgage Insurance Companies

  16. Fannie Mae • Policy - Highlights • Presale • Budget Review • HOA delinquency & 10% reserves • Owner occupancy • Single Entity Ownership • Exceptions/Variances • Sub phasing & presale • Budget & Reserves • Commercial space allowance • Developer rentals – 10% entity & owner occupancy

  17. FHA • New Policy – Effective 12/7/09 • All projects “Existing & New Construction” require approval • For 2010 – 30% presale • For 2010 – 50% exposure with some allowance to 60% • 10 year structural warranty not required • 2+ unit projects allowed • Detached no longer requires approval • Right of refusal can be allowed • 25% commercial space allowance • 10% line item required for reserves • 10% single entity ownership • 15% maximum HOA delinquency • Few if any exceptions allowed

  18. FHA • Approval Processes • DELRAP • Lender Delegated Review & Approval Process • HRAP • HUD Review & Approval Process

  19. VA • Policy • 70% Presale Requirement • Will allow new construction project in Flood Zone • Will NOT accept any Right of Refusal language • Will not reciprocate with FHA approvals unless the FHA approval was approved prior to 12/7/09

  20. Reciprocity • FNMA will no longer accept FHA approvals • FHA never did accept FNMA • VA will not accept FHA • Three separate and distinct “GSE” approvals may now be required for single project.

  21. MI Companies • Starting to see some enhancements – slowly • Probably lender/portfolio specific? • 95% LTV availability • Credit overlays • Agency project approval requirements

  22. What does it all mean? • Maintain an understanding of requirements • Understand your local market • Variances require careful analysis and a plan • Be ready & willing to make amendments/changes • Be very proactive and pre-emptive

  23. Questions? Contact: Dave Nielson David.Nielsen@wellsfargo.com Joe Reynolds Joe.Reynolds@wellsfargo.com Shane Spink Shane.Spink@wellsfargo.com 23

  24. THE DEVELOPMENT ADVISOR 2009 ANNUAL ATLANTA MARKET REVIEW For more information, visit www.NRTDevelopmentAdvisors.com and www.CBVirtualViews.com.

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