Selling or buying a condo in Margate, Ventnor or Longport just got a little more complicated. To be clear, this news affects the entire country, especially Real Estate transactions along our coasts.
In June 2021, part of the Champlain Towers South condo building in Surfside, Florida collapsed. 98 people died and others suffered injuries from the fall.
At the time, condo owners were just starting structural remediation. This was due to problems reported about the nearly 40-year-old building as early as three years prior.
SB 1702 is set to go before the Senate for approval. It requires that condo buildings at least three stories in height (or more) be subject to an inspection 20 years after their construction date. Then, they must perform a new inspection every seven years thereafter.
This requirement pertains to any three-story or higher condo building within three miles of the coastline. In turn, Freddie Mac and Fannie Mae set new mortgage restrictions for Jersey Shore condo buyers.
This may make selling your condo a little more difficult.
New Mortgage Restrictions for Jersey Shore Condo Buyers
Fannie Mae and Freddie Mac are two of the largest government-backed mortgage buyers in the country. They now require banks to assess the condition of a condo building before approving a mortgage loan for it or one of its units.
If their evaluation finds critical repairs or deficiencies are necessary, they will not back these loans. And, if owners of condo buildings refused to set aside enough money specifically earmarked for taking care of these issues, they may end up refused by Fannie Mae and Freddie Mac as well.
If either one of these entities refuses to back the loan, the lender will refuse the loan to the Jersey Shore condo buyer as well.
As of January 1st, Fannie Mae incorporated these restrictions. Freddie Mac said that any condo sale transaction closing after the end of February must follow these rules as well. While currently only temporary, Freddie Mac expects to permanently instill them sometime this year.
We expect this to hit potential buyers of older condo units the hardest.
This could become a “new norm” for any Jersey Shore condo buyer. Talk to your lender about these new rules before you start your new home search.
Sherri Lilienfeld, Apex Prime Realty, Your Source for Jersey Shore Real Estate