Fannie Mae New Condominium Guidelines
Fannie Mae has recently announced changes to their condominium guidelines. These changes will have the largest effect on investment condominiums, new condominium projects and mortgages that exceed 90% financing. Please let me know if you have any questions or need further clarification.
New Attached Condominiums:
1.) Must be substantially complete (cert of occupancy issued).
2.) 51% must be under contract to owner occupied/second home purchasers
3.) Budgets must be reviewed for the following:
a. Income meets proposed expenditures
b. 10% of total budget dedicated to replacement reserves
c. Adequate funding for insurance deductible
4.) No single entity (other than the developer during the initial sales phase) can own more than 10% of the total units
5.) Commercial space cannot exceed 20% of the total square footage of the project
Established Attached Condominiums (owner occupied/second home)
1.) Must be 100% complete
2.) Budgets must be reviewed for the following:
a. Income meets proposed expenditures
b. 10% of total budget dedicated to replacement reserves
c. Adequate funding for insurance deductible
3.) No single entity (other than the developer during the initial sales phase) can own more than 10% of the total units
4.) Commercial space cannot exceed 20% of the total square footage of the project
5.) Condo fees over 30 days delinquent cannot exceed 15% of the total units in the project
6.) IF PURPOSE OF LOAN IS TO PURCHASE/REFINANCE AN INVESTMENT CONDOMINIUM, THEN 51% OF TOTAL UNITS IN THE PROJECT MUST BE SOLD TO OWNER OCCUPANTS/SECOND HOMES.
2-4 Unit Condominium Projects
1) No single entity may own more than one unit within the project.
2) All units and common elements must be 100% complete
3) All but one unit in the project must have been conveyed to owner-occupant Principal residence or second home purchasers.
