Henry Ford once said, “the only mistake is the one from which we learn nothing.” To be sure, there are tons of mistakes that happen in the housing industry that are worth learning from, but few lessons have been as painful as the ones following the tragedy that took place in Surfside, Fla. last year.
The collapse of the Champlain Towers and the loss of 98 lives has forever changed the condominium market. There have been few larger examples of this fact than Fannie Mae and Freddie Mac’s new guidance for financing condo and co-op properties, which will have a huge impact on the mortgage industry.
In particular, the new guidelines will significantly alter condo project reviews, which are going to be infinitely more complex and labor-intensive than before. Fortunately, there are things lenders can do to prepare.
Following Up on Fannie Mae and Freddie Mac Guidance
The new GSE guidance offers a lot for lenders to chew on, starting with determining which condo projects are even available for financing. For example, before lenders can do anything on a Fannie Mae loan, they need to check Fannie Mae’s Condo Project Manager to see if the property the borrower wants to buy is actually available for financing. If it’s on Fannie’s new “unavailable” list, the answer is no.