Published Date 7/7/2023

Big news hit the housing market this Wednesday July 5th! Heavy hitters of the housing world, Fannie Mae and Freddie Mac, unrolled some fresh updates. They're putting a sharper focus on their condominium and co-operative project standards policies. Why? To help bolster the safety of properties in desperate need of repairs and special assessments.

"In response to orders from the FHFA, we've partnered with Fannie Mae and Freddie Mac to refine project review necessities," states the update. "We aim to support lenders in pinpointing problematic projects that could potentially lead to dangerous living conditions. Our ultimate goal, to boost sustainable homeownership."

Wondering what these policy changes look like? Fannie Mae is tightening the reins on projects that need critical repairs or that suffer from material deficiencies. These might include considerable deferred maintenance or special assessments.

And that's not all. These new project review rules will also:

·         Clearly define terms like “critical repairs”, “material deficiencies”, and “significant deferred maintenance”.

·         Prevent the sale of condo units or co-op shares in complexes that either require major maintenance or are subject to evacuation orders due to unsafe conditions.

·         Mandate a review of any structural or mechanical inspection reports that were completed within 3 years of the project review date.

Working closely with the Federal Housing Finance Agency (FHFA), Fannie Mae has updated its Selling Guide. This means that the sale of condo units or co-op shares in projects with outstanding repairs of more than $10,000 per unit will be prohibited.

Freddie Mac, on the other hand, has released an update to its Condo Project Advisor. This is a go-to platform for all your building information.

Currently, an 'Incomplete Assessment' feedback message from the Project Assessment Request (PAR) submitted to the Condo Project Advisor indicates an assessment hiccup. But don't worry! Starting from July 29, 2023, the system will send an alert if the project may need critical repairs. That way, you can easily decide whether the project needs some fixing up.

Mark your calendars, because these requirements will be in full swing starting September 18, 2023!

These changes come on the heels of a Oct 2021 letter issued by Fannie Mae. This introduced temporary requirements for condos and co-op projects after the devastating partial collapse of the Champlain Towers South in Florida on June 24, 2021. The heartbreaking incident led to 98 tragic deaths and 14 injuries. These new updates are a significant move toward preventing such occurrences in the future. Let's hope they succeed in making our homes safer places to live!

If you need any help navigating all this, please call Gene Fuessel for more information at: 

Gene Fuessel
Sr. Loan Officer/Broker | NMLS 181064
Mortgage Solutions Group - Powered by Xpert Home Lending, Inc. | NMLS 2179191
Direct: 512.733.6207