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Condominium Project Reviews

Recent Updates

Bulletins from the most recent Selling Guide updates:

Overview

We offer expanded, comprehensive eligibility and review requirements for Mortgages secured by units in condominium projects. Our requirements provide for an efficient and effective workflow process. With clear and comprehensive criteria, it's easy to determine which requirements you need to satisfy to sell condominium unit mortgages to Freddie Mac. From a streamlined review for established condominium projects to reciprocal reviews, you have solutions and options for the condominium unit mortgages you originate.

Project Review and General Project Eligibility Requirements

Sellers must determine compliance with Freddie Mac’s condominium project review and eligibility requirements. See Section 5701.2, Condominium Project review and general Condominium Project eligibility requirements, in the Single-Family Seller/Servicer Guide (Guide) for these requirements. Included within Section 5701.2 is an easy to follow table with an overview of the condominium project review and eligibility requirements and our project review types.

Project review types:

  • Guide Section 5701.4, Streamlined Reviews
  • Guide Section 5701.5, Established Condominium Projects
  • Guide Section 5701.6, New Condominium Projects
  • Guide Section 5701.9, Reciprocal Project Reviews

See Exempt From Review (Guide Section 5701.7) for which condominium unit mortgages do not need to comply with the eligibility requirements in any of these project review types.

Streamlined Review for Established Condominium Projects

We've combined flexibility and simplicity in Freddie Mac's streamlined review for established condominium projects. With a streamlined review (Guide Section 5701.4), only the following requirements need to be met:

  • The unit must be in an established condominium project.
  • The mortgage must meet the required LTV/TLTV/HTLTV ratios for the occupancy type.

There must not be any manufactured homes in the condominium project.Effective for mortgages with settlement dates on and after November 19, 2018, the investment property occupancy type is now eligible (Guide Section 5701.4(c))

Lender Benefits

  • The process is easy and cost-effective. When you meet the eligibility requirements of a streamlined review, you will not be required to comply with the eligibility requirements for an established condominium project.
  • Approve more of your condominium unit mortgages by using the streamlined review.

If the streamlined review requirements are not met, follow the Established Condominium Projects requirements (Guide Section 5701.5).

Established and New Condominium Projects

Project status Definition
Established Condominium Projects

Guide Sections 5701.1(b) and 5701.5

It is an Established Condominium Project if:

  • The condominium project (all condominium units, common elements, and amenities) and related facilities owned by any master association are complete and not subject to any additional phasing;
  • With respect to unit ownership:
    • At least 75% of the total units in the project have been conveyed to the unit purchasers or
    • If the project is a 2- to 4-unit condominium project, all units in the project have been conveyed to the unit purchasers; and
  • The unit owners control the homeowners association.
New Condominium Projects

Guide Sections 5701.1(b) and 5701.6

It is a New Condominium Project if:

  • The condominium project (all condominium units, common elements, and amenities) and related facilities owned by any master association are not complete, or are subject to additional phasing, except that for 2- to 4-unit condominium projects, all condominium units, common elements and amenities of the condominium project are complete and not subject to any additional phasing
  • Fewer than 75% of the total number of units in the project must have been conveyed to the unit purchasers, except that for 2- to 4-unit condominium projects, all but one unit in the project must have been conveyed or must be under contract to the unit purchasers; or
  • The developer has not turned control of the homeowners association over to the unit owners.

Download our Condominium Unit Mortgages and Project Reviews fact sheet and review the Guide Sections listed in the table above for more details. You'll also want to use one of the following optional forms to collect information from HOAs and management firms: Condominium Project Questionnaire – Full Form or Condominium Project Questionnaire – Short Form.

Lender Benefits

  • Quickly identify condominium projects and determine which eligibility requirements you must satisfy to sell us condominium unit mortgages.
  • Specific condominium project criteria help you approve projects easily and sell more condominium unit mortgages to Freddie Mac.

Reciprocal Project Reviews

Our reciprocal project review (Guide Section 5701.9) option provides you with more flexibility. Acceptable reciprocal reviews include:

  • Fannie Mae Project Eligibility Review Service (PERS) – Final project approval.
  • Fannie Mae "Full Review," submitted to Fannie Mae's Condo Project ManagerTM (CPMTM)* and received a project acceptance certification.
  • Federal Housing Administration (FHA) – approved condominium projects for FHA mortgages, list available online at https://entp.hud.gov/idapp/html/condlook.cfm.

See Guide Section 5701.9 for the eligibility requirements.

Lender Benefits

  • Reciprocal reviews may provide you more flexibility to capture additional market share.

Exempt From Review

We’ve added more flexibility and simplicity by exempting certain condominium unit mortgages from review. To be eligible under Exempt From Review (Guide Section 5701.7) the mortgage must meet the requirements detailed in 5701.7 including the mortgage must be:

  • Secured by a condominium unit in a 2- to 4-unit condominium project, or
  • Secured by a detached condominium unit, or
  • A Freddie Mac owned “no cash-out” refinance condominium unit mortgage

Sellers still have the option to choose:

  • the streamlined project review type (Guide Section 5701.4) for mortgages secured by a condominium unit in a 2- to 4-unit condominium project
  • the Established Condominium Projects review type (Guide Section 5701.5) or New Condominium Projects review type (Guide Section 5701.6) for mortgages secured by a condominium unit in a 2- to 4-unit condominium project or by a detached condominium unit.

Lender Benefits

  • The process is easy and cost-effective. You will not be required to comply with all the project review requirements for an established or new condominium project.
  • Approve more of your condominium unit mortgages, with fewer applicable requirements.

Condo Project AdvisorSM

If a Seller determines that a condominium unit in an established condominium project does not meet certain Freddie Mac project eligibility requirements and concludes that the condominium unit is still adequate collateral for the mortgage transaction, see Section 5701.1(c) for information on requesting Freddie Mac to consider a waiver of certain project eligibility requirements. Sellers may also contact their Freddie Mac account representative for more information as well as refer to the Condo Project Advisor web page and Condo Project Advisor FAQs.

Get More Information

The information on this page is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or other Pricing Identifier Terms.

*Condo Project Manager and CPM are trademarks of Fannie Mae.

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