Freddie Mac unveiled a series of updates to its Condo Project Advisor tool Wednesday, aimed at simplifying condo loan originations and enhancing lender security through a new designation.
The new designation, referred to as "project certified" status for Project Assessment Requests (PAR), validates that condominium properties meet specific project review and general eligibility criteria for financing, Freddie Mac said. Once a property achieves this status, lenders will only need to conduct minimal project underwriting, potentially saving time for lenders and money for borrowers.
Moreover, lenders can now apply for project-certified status at no cost for particular projects, primarily those "for loans secured by units in condo projects that don't already carry this status," the GSE elaborated.
“Condominiums provide a key path to homeownership, particularly for first-time and low-income homebuyers. Considering the challenges facing the housing market currently, it should come as no surprise that condo financing is especially critical,” said Tanya DeLia, single-family vice president of collateral risk management at Freddie Mac. “We are committed to continuing to find ways to help streamline condo loan originations while helping lenders ensure that condo homebuyers are put on a path of sustainable and successful homeownership in condo communities.”
The project-certified designation will become available to all Freddie Mac-authorized lenders utilizing Condo Project Advisor starting Dec. 8, 2023.
The Community Home Lenders of America (CHLA) welcomed the development, recognizing the importance of transparency for condo associations and lenders regarding condo projects eligible for Freddie Mac loans. CHLA commended Freddie Mac for its efforts and noted that these actions could facilitate access to affordable mortgage loans for condos, which represent one of the most affordable segments of the housing market.
The Community Associations Institute (CAI) also applauded the move.
"CAI is hopeful this move will improve access to lending in the U.S. At a time when there is a heightened awareness and increased emphasis on building maintenance and challenges related to property insurance requirements restricting access to lending proves to lower property values, leaving less money and incentive for homeowners to invest in maintenance, especially in urban opportunity zones throughout the U.S.," the group said on its website. "Hopefully, this move will create greater access to lending for condominium buyers and sellers.
