Miami REALTORS® Stand Up for Condominium Buyers
“Affordable housing” can mean different things in different markets. In Florida’s Miami-Dade and Broward counties, it usually means condominiums, which now make up about 60% of local housing inventory.
For many potential condominium buyers, finding financing is difficult. Many lenders are requiring buyers to make down payments of 20% to 30% of the purchase price to qualify for a mortgage. Such requirements make purchasing a home a less-realistic option, particularly for first-time buyers.
To deal with this issue, Miami REALTORS® formed a task force to better communicate with lenders about needed financing for condominium buyers.
However, Danielle Blake, senior vice president and government affairs director of the Miami Association of REALTORS®, says the real problem is not the need for education but for regulation. Two of the nation’s largest residential real estate lenders — the Federal Housing Administration and Fannie Mae — have approved financing for only a tiny percentage of the condominiums available in Miami-Dade and Broward counties. The approval rate is less than 1%, compared to a nationwide approval rate of about 30%.
The sticking point is insurance. The FHA and Fannie Mae are unwilling to accept coinsurance, the penalty on loss recovery that insurers impose on property owners who insure their buildings for less than their full replacement values. Miami REALTORS® are asking regulators and the Florida legislature to look at the issue.
While the problem may appear to be a local one for the Miami-Dade and Broward markets, the solution will be found at the state and federal levels. The Miami Association of REALTORS® is working with the Florida and national REALTOR® associations, and Blake says the push to solve the condominium financing problem is probably the biggest effort by state, local and national associations she has ever seen.
Keeping home buying within the reach of everyone can involve a lot of different strategies. As the Miami Association of REALTORS® has shown, coordinated efforts against regulatory hurdles can be a valuable strategy.