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FINANCING GUIDELINES FOR NEW CONDO PROJECTS – WHAT BUYERS MUST KNOW
July 30th, 2012
13.1.8. Full Review: New Condominium Projects
The following guidelines apply to new condominium projects, excluding 2- to 4-unit projects.
All General Eligibility Requirements as listed above including:
*The Project or the subject legal phase, must be substantially complete. This means that a Certificate of Occupancy (or similar document) has been issued for the building, project, or subject legal phase and that all units in building/phase are complete subject to the installation of “buyer selected items” such as appliances.
*At least 70% of the total units in the project or subject legal phase must be under a bona fide contract for purchase or conveyed to principal residence or second home purchasers. REO units that are for sale (not rented) may be counted as owner-occupied units within the owner-occupancy ratio.
*New construction and newly converted attached condominiums in the state of Florida must have Project Eligibility Review Service (PERS) approval.
*An attorney Opinion Letter is required issuing a written opinion based upon a review of the project’s legal documents stating they are in compliance with the legal requirements described herein for all projects subject to PERS review.
*No single entity (the same individual, investor group, partnership, or corporation), other than the developer during the initial marketing period, may own more than 10% of the total units in the project, or if the project has 5-10 unit’s only one unit may be owned by a single entity.
*No more than 20% of the total project square footage can be used for non-residential purposes.
*A review of the Homeowner’s Association projected budget is required to determine: the budget is adequate, provides for the funding of replacement reserves for capital expenditures and deferred maintenance (at least 10% of budget), and provides adequate funding for insurance deductible amounts.
*All units in the project must be owned fee simple or leasehold, and the unit owners must be the sole owners of, and have rights to the use of, the project’s facilities, common elements, and limited common elements.
*No more than 15% of total units in a project can be 30 days or more past due on the payment of their condominium/association fee payments.