GSEs Standardize Condominium Project Questionnaires to Increase Consistency, Improve Process
March 29, 2016
Working together under the Uniform Mortgage Data Program®, an initiative undertaken at the direction of the Federal Housing Finance Agency, Freddie Mac and Fannie Mae (the GSEs) have developed standardized Condominium Project Questionnaire forms. The new forms provide greater consistency and clarity for lenders as they work to collect information to determine eligibility for mortgages secured by units in condominium projects.
Condominium Project Questionnaire
For each mortgage secured by a unit in a condominium project, the GSEs require lenders to determine the eligibility of the condominium project. Project eligibility requirements include items such as financial viability, the residential nature of the project (for example, does the project also include commercial space, hotel operation, business income, etc.), and the ownership structure.
Until now, condominium homeowners' associations (HOAs) and condominium management firms were asked to fill out and update many different versions of lenders' condominium project eligibility questionnaire forms, making it a time-consuming process.
The GSEs created the new standardized forms based on lender and industry feedback collected over the years, as well as from a recent GSE survey. The following forms provide lenders with a convenient way to collect information from the HOAs about the condominium project in a consistent and easy-to-understand format:
- Condominium Project Questionnaire – Full Form (Fannie Mae Form 1076/ Freddie Mac Form 476), which provides a list of eligibility questions to support a full condominium project approval process for new and established condominium projects, and
- Condominium Project Questionnaire – Short Form (Fannie Mae Form 1077/Freddie Mac Form 477), which provides a shorter list of questions to facilitate a limited or streamlined review of condominium projects.
While lender use of these new condominium project questionnaire forms is optional at this time, lenders are strongly encouraged to begin using and retaining them in the project review file. As part of a lender's underwriting review of the project, these forms will help streamline the evaluation of condominium projects and create greater consistency and efficiencies throughout the industry.
The GSEs will be updating their respective selling guides to incorporate the optional questionnaire forms at a later date. Please note that while Freddie Mac and Fannie Mae are working together on this standardization effort, the GSEs' condominium project review and eligibility policies and requirements remain separate and unchanged by the release of these forms.
A More Streamlined Process
With the new forms, lenders, HOAs and management firms will benefit from:
- A streamlined process: The forms require information in a consistent format, regardless of the lender. HOAs and management firms will be able to complete either the full or short form once, and then easily update the forms as information changes, saving them time and effort.
- Greater consistency: With clear and consistent terminology, lenders, HOAs and management firms will have a common understanding of the data needed for the condominium project evaluation process.
- Faster, easier: Lenders are likely to receive the required information more quickly as HOAs and management firms become familiar with the standardized forms and can update the data more easily. The result is likely a faster turnaround as lenders gather the information they need for their project eligibility review.
Please share the new forms with your loan originators and the HOAs and management firms that you work with today. Encourage them to use the forms for all future loans secured by condominium units. If you have questions, please contact your Freddie Mac representative.