Recently both Fannie Mae and Freddie Mac released guideline changes going into effect on September 18th. 2023. While most of the changes simply made temporary guidelines permanent, these 5 areas of focus have become incredibly important for both agency mortgage availability as well as portfolio and non-warrantable lending in condo and co-op properties.
- Structural and Mechanical Critical Repairs and Deferred Maintenance: Properties must complete all critical repairs prior to mortgage financing being available for borrowers.
- Special Assessments: Can be used to replenish reserve accounts but dependent on repayment terms, special assessments may make properties ineligible.
- Reserves, Reserve Studies and Capital Loans: Substantial reserves must be available for ongoing maintenance and repair. Reserve studies and capital loans are acceptable and utilized to define capital needs and create financial stability in condo and co-op properties.
- Insurance Compliance: HOA Insurance must meet new standards and be sufficient to prevent financial difficulty for owners in instances of major calamity.
- Property Violations and Litigation: Mandatory review: Cannot impact negatively on health and safety of unit owners. Violations and litigation review required for eligibility determinations.
These agency guideline changes are important to ensure the health and safety of unit owners and secure the financial health of condominium and cooperative properties.
Listen to the webinar: https://youtu.be/i0dmGEgt7eY
View presentation: https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:19978936-527b-41fb-9674-e7f54a5ddb4a