What have we learned 6 months into condo financing changes?

Since Fannie Mae and Freddie Mac updated condominium safety and soundness requirements and rules in December 2021, we’ve learned a lot. We wanted to share the ways we can help navigate this topic as well as best practices for you to use to help make you the experts that consumers gravitate towards when it comes to selling and buying condominiums.

    • Associations have to disclose all pending and future special assessments and be prepared to show what they’re for and provide documentation if there is an imminent health and safety impact.  
  • Getting this information from your sellers and having that on hand to provide the buyer’s lender results in huge time savings.
    • Many associations or management companies are refusing to complete the required Fannie Mae/Freddie Mac addendum. This requires lenders to start asking for association documents such as meeting minutes, balance sheets, and budgets to see if there is any evidence of work either being done or needing to be done that would pose an imminent risk.  
  • If the loan was structured without requiring any of this required documentation, it may not meet the standard requirements for funding reserves. Knowing this upfront could save a lot of time and trouble for all parties involved.
  • Best practices:
  • Do the homework upfront: Specifically, if you are the listing agent and have this information available to give to the lender — it will keep the financing on track.
  • Keep an office-wide library of these documents to share: If you happen to have a buyer in a building you can share with us (your lender of choice!) and keep the processing moving along.
  • Check listing of unapproved condos that have imminent safety issues (your Key LO can help you with this): Our Key LO can check to see if your project is on our company maintained list, we can do some due diligence and determine if the situation has been rectified or if indeed the project would be ineligible for financing. This is important information for both buyers and sellers.


This is why having your client consult with a Key Mortgage loan officer who is educated and versed on condominium rules is not just helpful, it can save your next deal and ensure a positive experience for all. Need more information or have someone we can help, reach out to a Key Mortgage loan officer today!

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