CAI is proud to announce the release of Condominium Lending: Fannie Mae/Freddie Mac Your Condominium Association/Housing Coop Eligibility Status. The guidance document is designed to help community associations understand and address lending eligibility issues that may impact property values and home sales.
Since the tragic partial collapse of Champlain Towers South in Surfside, Fla., Fannie Mae and Freddie Mac underwriting requirements continue to frustrate condominiums and housing cooperatives. Condominium and housing cooperative buildings flagged as “ineligible” for financing by these government-sponsored enterprises face challenges in securing mortgage loans, putting home sales and the financial sustainability of the entire condominium at risk.
To better understand the impact of these policies, The Foundation for Community Association conducted a snap survey of more than 700 community association board members, managers, and business partners.
The findings continue to reinforce the urgent need for guidance and action. Here are some highlights:
- 42% said they are unsure whether their condominium association or co-op is eligible for Fannie Mae or Freddie Mac financing.
- 37% said they took steps to determine their eligibility status often after experiencing a denied mortgage loan in their community.
- 40% said their communities may have characteristics that could trigger ineligibility such as deferred maintenance, insufficient reserves, or pending litigation.
- Among those who were deemed ineligible, 64% said the denial negatively impacted home sales or property values in their community.
“This data tells us that a significant portion of condominium and housing cooperative buildings in the U.S. may unknowingly be unable to secure mortgage financing for sales of units in their building,” says Dawn Bauman, CAE, executive director of the Foundation for Community Association Research and CAI’s chief strategy officer. “We developed this resource to provide boards and managers with the tools they need to take proactive steps and maintain access to mortgage financing for their homeowners.”
The new guidance covers:
- Common reasons for ineligibility and how to resolve them.
- How to determine condominium association or housing cooperative eligibility status.
- Instructions to reinstate lending eligibility including links to tools like Fannie Mae’s Condo Project Manager™ and Freddie Mac’s Condo Project Advisor®.
Ineligible status can be reversed if community leaders understand what triggers it and what steps to take. CAI encourages association boards, managers, and management companies to download the guidance document and share it. Download the guidance document here.
If your condominium or cooperative is deemed ineligible and you’re unable to resolve the issues, contact your elected officials and request their assistance.
Dawn Bauman, CAE
Senior Vice President, Government & Public Affairs
Executive Director, Foundation for Community Association Research
Reprinted with permission from Community Associations Institute
https://advocacy.caionline.org/new-guidance-helps-navigate-fannie-mae-and-freddie-mac-lending-eligibility/