Getting a Mortgage Just Got Tougher

May 4, 2015 — There's a new Fannie Mae rule in town, and if not checked, it could throw a wrench in hundreds of co-op and condo apartment sales. "It's like one step forward, two steps back," laments Mitchell Unger, controller at the management company The Lovett Group. He found out the hard way about this new rule, which Fannie Mae, instituted on March 31. A broker handling a sale at Forest Hills South, a Queens co-op Lovett manages, "was working with Citibank, who notified the broker that the buyers were being turned down at this tremendously healthy building since [the cooperative corporation] had more than 15 percent of its income generated from non-shareholder revenue." Citibank also turned down buyers at another Lovett property, the tony Upper East Side's 49 E. 96th Street. The so-called "80/20 Rule" was relaxed in 2008, but co-ops and condos have been waiting until now for 30-year lease terms to expire so they can charge commercial tenants market-rate rents. Fannie Mae's new limit hits co-ops and condos just when their buildings finally stood to earn some serious money. Watch this space as we follow the story.