Finally, a win for CAI and for access to lending for some of the nation’s most affordable housing options – condominium units. Freddie Mac announced today they are taking a step towards transparency by creating eligibility statuses and expanding access to information about condominium projects that are eligible and ineligible for mortgage loan purchases, along with guidance as to action necessary to make the projects eligible.
Here is a link to Freddie Mac’s announcement. In the announcement you will find the following:
- Freddie Mac implemented a “Project Certified” status for condominium projects. Lenders can submit information on projects that may qualify projects for project-certified status and Freddie Mac will use their current information to determine eligibility status. The condominium buildings with project-certified status will be effective immediately and will signal to lenders Freddie Mac will buy the loans from lenders in these projects. There may be a limited need for lenders to obtain most of this information from a lender questionnaire on individual unit sales in the projects that are deemed certified.
- Beginning February 26, Freddie Mac will have an “ineligible” status for condominium projects that do not meet the Freddie Mac requirements. A key piece of transparency here is that Freddie Mac will allow condo board members and their managing agent a process to inquire about the status of the condominium project. If the project is ineligible, Freddie Mac will provide specific information about ineligibility allowing the condominium board and management to appeal the status. Information about this inquiry process may be found here.
CAI is extremely pleased to see this level of transparency by Freddie Mac and is encouraged by this step forward to provide solutions for condominium projects’ access to lending.
CAI is hopeful this move will improve access to lending in the U.S. At a time when there is a heightened awareness and increased emphasis on building maintenance and challenges related to property insurance requirements restricting access to lending proves to lower property values, leaving less money and incentive for homeowners to invest in maintenance, especially in urban opportunity zones throughout the U.S. Hopefully, this move will create greater access to lending for condominium buyers and sellers.
For more than a year, Community Associations Institute (CAI), the international leader for community association education, governance, and management, has been working with a coalition of partners; including the Community Home Lenders of America (CHLA) and the National Association of Realtors (NAR) to voice concerns about the Fannie Mae and Freddie Mac condo lending guidelines emphasizes the need for transparency in the development of guidelines and policies and publication of ineligible condominium and housing cooperative projects. Today’s news is a step in the right direction.
CAI has not heard from Fannie Mae regarding how they handle condominium project eligibility and transparency. Stay tuned for more information as it becomes available.