Current lending guidelines for condo mortgages are tighter compared to single-family mortgages
Serious delinquency rates for condo mortgage loans saw a downturn in the top 25 markets nationwide, according to a report from CoreLogic.
Serious delinquency, defined as 90 days or more past due or in foreclosure proceedings, inched down to less than 1%.
The delinquency rate for condos was lower than for other single-family residence (SFR) mortgages. The report suggested that the lower delinquency rate for condos indicates underwriting guidelines are more rigid compared to other SFRs.
After Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) tightened their lending standards, the current lending guidelines for condo mortgages expanded its focus on capital reserve and higher owner occupancy rates.
According to CoreLogic, older loans have a heavy influence on the current delinquency rates, as most seriously delinquent condo and SFR loans early this year were originated between 2003 and 2009.
2007 saw the highest delinquency rate for both condo and other SFR loans originated in that year, while 2015 had the lowest delinquency rate for both types of loans originated.
