Loosening lending restrictions make it easier for Hawaii condominium buyers to get mortgages - Pacific Business News 6/7/19,

9, 8)06 AM

Loosening lending restrictions

make it easier for Hawaii condo
buyers
Janis L. Magin Jun 5, 2019, 9:59pm EDT

Kakaako condominium towers Hokua, left, Nauru Tower, left center, 1350 Ala Moana, center,
Hawaiki Tower, right, are seen in this file photo. Lending flexibility is making it easier for borrowers
to get a mortgage on a condo unit.
Eugene Tanner PBN

With condominium sales playing an outsized role in the number of homes

sold in Hawaii each year, especially on Oahu, moves by mortgage giants
Fannie Mae and Freddie Mac to loosen lending restrictions are making it
easier for buyers.

Hawaii has the highest share of condominium mortgage originations in the

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Loosening lending restrictions make it easier for Hawaii condominium buyers to get mortgages - Pacific Business News 6/7/19, 8)06 AM

United States at 42% — far higher than the national average of 8% and well
above Washington, D.C., which had 37%, according to CoreLogic.

On Oahu, condo sales account for about 60% of all home sales — in 2018, it
was 61 percent, according to the Honolulu Board of Realtors, and while there
are many reasons for that, easier lending rules could boost that percentage
even further.

Keri Shepherd, branch manager at Homebridge Hawaii, said one stumbling

block that has tied up condo sales was the owner-occupancy rule — Fannie
Mae and Freddie Mac used to require that 51% or more of all units in condo
buildings be owned by owner occupants, meaning fewer than 50% could be
owned by investors, before they would approve a loan.

“They got rid of that,” Shepherd said. “If the investor is putting down 25% or
more, they don’t look at owner occupancy.”

Fannie Mae and Freddie Mac have also relaxed the rules on commercial space
in a condo building to allow 35% of the space as commercial, from the
previous 25 % —noteworthy in Honolulu, where nearly every new building is
mixed-use.

“We’re just seeing more flexibility with lending guidelines,” Shepherd said.
“People are realizing, [for example], with self-employed borrowers – they’re
making money, we need to figure out a way to help them qualify.”

Meanwhile, the Trump administration is reportedly finalizing plans to return

Fannie Mae and Freddie Mac to private control, more than a decade after the
government seized the two firms to save them from collapse during the
financial crisis. The Wall Street Journal reports that returning them to
private control could put them on sounder financial footing.

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