The House Financial Services Committee yesterday received testimony from Federal Housing Finance Agency Director Sandra Thompson. In a memo, CAI urged members of the committee to ask Thompson about ways to improve access to mortgage credit for condominium and cooperative homeowners and homebuyers residing in structurally safe buildings.
We pointed out the Fannie Mae and Freddie Mac condominium and cooperative policy directive is disrupting access to mortgage credit for homeowners in safe buildings. In a survey of the condominium industry, 72% of respondents were impacted by the new guidelines, 45% reported mortgage closing delays, and 28% indicated the guidelines caused loan denials in condominium projects with no identifiable structural or financial integrity issues. Read the full memo.
We shared our work with other stakeholders, including the National Association of Realtors, Mortgage Bankers Association, and the Community Home Lenders of America who also requested FHFA suspend and revise the new guidelines.
CAI and other stakeholders have provided constructive feedback on policies to improve condominium and cooperative building safety and access to mortgage credit. After receiving stakeholder and customer feedback, Fannie Mae and Freddie Mac proposed revisions to FHFA. Regrettably, FHFA has delayed the release of any revised guidelines.
We provided specific policy solutions.
Preserving the safety of condominium and cooperative housing is a key priority of CAI. We’ve submitted feedback on FHFA’s temporary guidelines, requesting the following revisions:
- Elimination of forward-looking, speculative questions that condominium association boards and managers are unable to answer factually.
- Elimination of questions that exceed the core competencies of condominium association boards and managers (e.g., questions that require board members or managers to render a legal opinion).
- Targeting risk management activities to condominium projects most likely to benefit from scrutiny (e.g., condominium projects over 20 years old and located in areas at higher risk of salt-based corrosion).
- Streamlining questionnaires implementing temporary guidance to effectively collect relevant information and reduce burdens on condominium association boards and managers.
We urged the House Financial Services Committee to ask specific questions of FHFA Director Thompson to better understand why changes haven’t been made and to determine if they are forthcoming.
CAI will continue to advocate for changes to the Fannie Mae and Freddie Mac condo and housing cooperative lending guidelines to ensure capital in the condo marketplace.