If you’re thinking about buying a condo, and waiting until prices come down further, you might want to think about that a bit.  Fannie Mae announced in December that effective April 1, a new Loan Level Price Adjustment (LLPA) would apply to condo and co-op loans.  The grids can be found here.

Now what does that mean for you, the Atlanta Condo buyer?

It means that even if you have a great credit score, if you have less than a 25% down payment, you are going to be charged a fee of up to .75%.  Basically, if you have a $300,000 condo, and you have a $240,000 mortgage (20% down), if Fannie purchases your loan from your lender, they will charge you a fee of $1800.

Now that may not be enough to keep you from buying that condo.  But it sure does not help this already pressured market to have additional closing costs.

You may not see this fee at closing – it might be folded into your mortgage rate.  That could result in a raise of the interest rate a half point or more.  So while the Fed is lowering rates, this action by Fannie Mae offsets those reductions for condo buyers, even for those with great credit.

So what can I advise you to do?  Buy now and avoid the hit, or buy later, and take the hit, hoping for even lower prices?  I really cannot advise you on either of those questions, as it depends on your individual needs as a buyer and homeowner.  But here is what I can advise you:

1. Work with a qualified mortgage professional, and know your monthly payment and closing costs up front.  Make your decisions based on what works best for you in the current environment, and how your needs are best met.
2. Clean up your credit if it needs some adjustment.  These fees are tied to credit score – and the lower your score, the higher the fee.
3. Let me know your needs and what you truly desire in Atlanta condo living – and I will assist you in a realistic search for the purchase of a home that you can definitely close on at a price you can afford.