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Update in Buying Condominiums

July 20, 2023

Urgent Update for Condo Buyers and Sellers: New Requirements from Fannie Mae and Freddie Mac to Ensure Smooth Transactions

There’s some new and urgent news out there! 

Transcript

Ryan Hillard: If you’re looking to buy or sell a condo right now! Effective immediately, both Fannie Mae and Freddie Mac are requiring additional documentation with respect to condos in order to ensure the condominium project does not have any significant deferred maintenance. 

There’s a number of things that they can request and some of that documentation may include

Ryan Hillard: 

  1. The H.O.A. can self-certify, and they can also charge a fee to complete the necessary Form 1076. 
  2. They can provide a reserve study that was prepared within a year of the closing.
  3. A structural report completed by an engineer, architect, or building inspector.
  4. A current budget showing no special assessments.
  5. The H.O.A. meeting notes showing no assessment. 

Ryan Hillard: It’s also possible, or likely, that lenders will require a combination of these items, so one of those may not satisfy the entire requirement. Since both Fannie and Freddie are united on this, it is not likely or probably not even possible that you would be able to obtain a conforming loan unless these guidelines are met. 

Ryan Hillard: Finally, this will also affect any transactions that are in process. So again, if you’re looking to buy or sell a condo there are additional items here in respect to deferred maintenance that would need to be taken into account.