Do you remember when the Champlain Towers South condominium building in Surfside collapsed last June? This catastrophic accident brought to light how structural flaws and overdue repairs can result in unspeakable tragedy. In places where high-rise condo living is the norm (like New York City), people began to wonder if their buildings are as safe and sound as they think.

Condo residents are not the only ones who have concerns. In recent months, Fannie Mae and Freddie Mac have increased scrutiny of repairs for residential buildings having more than four units. These stricter requirements are currently ramping up, and we expect them to be in full force by the first of the year.

At MortgageDepot, we are committed to making your condo or co-op purchase as seamless as possible. Knowledge is power, and the more you know about Fannie Mae and Freddie Mac’s new requirements, the better your chances of scoring your dream home.

Condo Project Manager: The First Step To Determine Eligibility

When dealing with Fannie Mae loans, mortgage professionals use an online tool called Condo Project Manager, or CPM for short. This handy program helps loan officers determine if a particular condo or co-op building meets Fannie Mae’s lending requirements. CPM will soon reflect stricter guidelines, so condo or co-op buildings that have previously passed the program might not fly in the future.

Stricter Requirements for Building Safety

Here’s the deal: If a condo or co-op building needs repairs, Fannie Mae and Freddie Mac want details. Here is some of the info that they will need to know about the condo you want to buy:

  • They will go over appraisal reports with a fine-toothed comb, looking for details on deferred maintenance projects, including roof, HVAC and plumbing repairs.
  • Special assessments, even if they are paid in full, will undergo a review process to determine if they are acceptable.
  • If any current or previous special assessments have had a negative effect on the financial stability of the HOA or the building’s marketability, they will undergo an in-depth review.
  • The CPM program will probably require information from financial reserve studies.
  • Project Inspections Waivers, or PIWs, might be tough to obtain due to changes in the CPM.
  • We might need to track down the past six months of HOA meeting minutes so that Fannie Mae or Freddie Mac can see if any repair or maintenance concerns appear and how they are handled.

Contact MortgageDepot Today!

If this sounds intimidating, don’t worry! We are a team of dedicated loan officers who will expertly guide you through the mortgage approval process. Contact us today to learn how to make that must-have condo yours!

Contact one of our loan consultants to learn more.

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