Carrboro resident and UNC professor Greg Gangi wanted to refinance his condominium, but banks would not approve his loan because of a Fannie Mae lending rule.
The rule states that loans will not be considered for condominiums in developments where more than 10 percent of the units are owned by one entity.
Two of the 16 condominiums at Carrboro’s Pacifica Cohousing Community, where Gangi lives, are owned by Orange County’s Community Home Trust.
This means Pacifica falls under the lending rule.
At the Carrboro Board of Aldermen meeting Tuesday night, Gangi said the rule has made it hard for him to refinance his condo.
Carrboro Mayor Mark Chilton said he understands Gangi’s frustration.
“If you don’t qualify, you have to go with an investment grade loan, which has a considerably higher interest rate,” he said.
But Gangi has found an exemption he thinks more people should know about.
After being rejected by two banks, Gangi contacted Robert Dowling, executive director of Community Home Trust. When Dowling contacted Fannie Mae’s community land trust project manager, he discovered there was an exemption to the rule that applies to community land trusts, which manage land for residents while preserving housing affordability.
This exemption includes the condominiums owned by the Community Home Trust at Pacifica.
Gangi said that with Dowling’s help he was able to start the refinancing process, but he wants more people to be aware of the exemption.
“Most people aren’t going to be this lucky,” he said. “They’ll give up.”
Dowling said banks are overwhelmed with bad loans and refinance applications, so they may not know about exemptions to the rule.
“It’s easier to just say ‘No, we don’t do that’ than to go through Fannie Mae guidelines and find where it says ‘Yes, you can do this,’” he said.
The Board of Aldermen voted to send letters to politicians urging them to investigate Fannie Mae’s rule.
Board members said they want information about the exemption to be forwarded to local banks.
At the meeting the board accepted a grant that will allow businesses along Roberson Street to connect to a public sewer.
The board also heard an update on the Carrboro WISE energy saving program.
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