Q: Why do lenders make such a big deal about personal property on contracts? – Griffith, Grant and Lackie agent in Lake Bluff

DP: All lenders have to follow specific guidelines. Personal property not affixed to the home (John Deere tractor, patio furniture, grill, etc.) are implied to have value once they are listed on a contract. A lender needs to identify through independent sources an estimate of the value of the items listed regardless of “no value” indication. That value is then treated as a sellers concession and deducted from the contract price in determining the amount of financing a lender can provide. Fannie/Freddie and all M.I. companies follow the same rules, and it’s actually written into appraisal regulatory rulings.

Q: What special incentives/programs, down payment assistance/grants can you offer my clients? – Baird & Warner agent in Highland Park

MO: As lenders, not only are we application originators, we’re also educators on the mortgage process and what it entails. I like to spend a lot of time with clients making sure they understand all product offerings and what type of loan they are getting, as well as their outlay of funds necessary for the transaction. Each client is different, so we try to gather information and find the best program, down payment assistance and incentives we can offer based on the individual situation. There are programs requiring as little as 3 percent down based on qualifying criteria, and down payment assistance may cover that depending on which program is used. Household income and property locations will help determine the best incentives or programs to assist the client.

Q: What makes a condo non-warrantable, and are you able to get buyers who want a non-warrantable condo a loan? – MetroPro Realty agent in Chicago

DG: That’s a great question, and it’s a lot more complicated than what we can fit in this column. I think it would help to define what makes a condo warrantable. Warrantable means that, per Fannie Mae and Freddie Mac, the condo building is suitable to deliver loans for the individual unit to them. Warrantability focuses on things such as the building being complete, units being sold (called pre-sale for new construction), investor concentration, financial health (budget and percentage of owners delinquent in assessment payments) and how much of the building is dedicated to commercial space. Should any of those categories not meet their guides, it’s considered “non-warrantable,” and we have to source alternative options outside of Fannie and Freddie.

Of course, there are probably many more questions agents have about lending. To stay current with what’s happening and changing in the mortgage market and what you need to know about, make sure you stay in contact with your preferred lender, or check Freddie Mac’s weekly report, out every Thursday: freddiemac.mwnewsroom.com/news.