Parks at Piedmont is a Lovely Condo Community in Gainesville, VA. Can YOU Buy There? The answer is anything but obvious.
You see, Parks at Piedmont condos were constructed by Engle Homes. And sadly, the construction hit the tail end of the boom, and languished in the beginning of the bust. Engle Homes declared bankruptcy without finishing two pad sites that would house twenty more condo units.
There are many short sales and foreclosures that hit the market in this community. Here's where a first time buyer runs into problems buying these fantastic condos.
Investor ratios that are allowable for HUD condo certification are thrown out of proportion by the number of absentee owners. At first these were banks that were holding foreclosures. And as a result of this limitation that was a no go for any FHA buyer, cash buyers who were primarily investors, have swooped in and kept these numbers out of whack for HUD to be able to certifiy the development.
That is not the only issue.
With the bankruptcy of the builder leaving the development unfinished, and with fewer condo owners paying dues into the association, AND the increasingly number of delinquent homeowners who are facing foreclosure not paying condo dues, even a conventional loan buyer putting 20% down can run into financing issues. The current condo dues delinquency rate is 19% and increasing at a rate of approximately 1% per week! What is allowable for conventional underwriting guidelines is 15%.
So who is the ideal buyer for Parks at Piedmont condos? Definitely cash buyers but how many first time buyers have just under $200,000 lying around in cash? None that I know. So the problem persists in this neighborhood. An ideal place for a first time buyer, but nearly impossible to purchase.
I am currently representing conventional loan buyers seeking an override from the loan underwriters on ths 15% maximum delinquency rule. If they can get that override, there may be hope fo conventional buyers as one more home owner paying their condo dues will help to offset the delinquerncy rate in the challenged community of Parks at Piedmont. I'm planning to have encouraging news for Parks at Piedmont buyers by week's end.
Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155. To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com. Or you can visit her website: www.nvarealestate.net.
Header is a combination of photos from the Bristow, Gainesville & Haymarket areas, taken by Chris Ann Cleland.
That delinquency rate is an issue for a new homebuyer Chris Ann. We had some Engle homes around our way too. So many builders that have struggled over the last several years.
Chris Ann-you have done better than most agents would do in learning all of the numbers required to make the deal fly. I'm always amazed at the agent's who argue with me when I tell them they can't use FHA or VA financing at one of the resale condo buildings where I do a good deal of business. DUH understand how lenders review condo buildings before you tell me your lender will make a deal fly in a building that has over 60% investor ownership!
Chris Ann - This is so unfortunate for buyer's interested in Parks at Piedmont. We also have several newer condo developments in a similar situation.
Chris, what a sad situation especially for the first time buyer. I can't say I've run into that around here.
What I do hear, from folks moving from Virgina to my area (mostly BRAC) is how expensive it is to live there...particularly Northern VA.
Hi Chris Ann... what an interesting story and scenario. Somehow I suspect that this is an issue facing many similar communities.
Gary: I'm going to wait until Thursday's settlement to expound on this, but there is a light at the end of the tunnel.
Cindy: It pays to know lender guidelines.
Michelle: I have some good news for buyers later this week.
Nick: It's not cheap to live here in Northern Virginia. Having grown up here, I am used to it.
Steve: You'd be surprised how many condo developments are not in this situation. This one instance is super screwed up.
Chris Ann...
You have very carefully chronicles the downward spiral of a community. Very well written post.
Richard: And from this point, it can only get better.
Hi Chris Ann, what a sad situation. We haven't seen that here, just the opposite when it comes to condo developments. They sell before the development is not even 50% built. You do have 200K sitting in your underwear drawer right? :)
Jackie: Shhh! You weren't supposed to tell anyone! ;)
Hey Chris Ann
Being a University town we have dealt ewith this absentee issue for years. I guess the rules are changing and becoming more rigid daily. I expect that trend to continue for a while. We had another one come down today on title company endorsements and minerals.
Trey: Mineral rights are something I've never had to deal with. That must be a challenge.