Fannie Mae to Reassess Lending Guidelines for Florida Condo Projects

January 7, 2010

About a year ago, Fannie Mae implemented strict lending guidelines that effectively put the lights out on the Florida condo market. In particular, these stringent guidelines made it next to impossible for buyers to obtain financing in the vast majority of condo developments in South Florida.

Earlier this afternoon, Fannie Mae made the announcement that it will reassess hundreds of condominium projects throughout the state in an effort to jump-start the market.  The news is a godsend to a condo market that was heavily supported by cash buyers in 2009.

Here are some excerpts regarding the announcement from PR Newswire and Reuters:

PR Newswire

Fannie Mae announced today that it is undertaking a comprehensive review of hundreds of condominium projects in the state of Florida in an effort to allow additional projects to become Fannie Mae-eligible through a new “Special Approval” designation.

A dedicated team of six Fannie Mae professionals based in Florida is conducting a thorough examination of condominium projects across the state that may not currently meet Fannie Mae’s standard eligibility criteria and assessing specific criteria more closely, including occupancy, homeownership association dues, financial stability of the project and property condition.  Projects deemed to be sufficiently stable following the closer examination are granted a Special Approval designation, meaning lenders can originate and deliver mortgage loans secured by units in these projects to Fannie Mae

Reuters – (full story)

Fannie Mae, the largest funder of U.S. home mortgages, on Thursday said it is making it easier for some Florida condo buyers to qualify for loans in a bid to stabilize one of the worst-hit real estate markets.

The housing finance giant said it is reassessing hundreds of Florida condo projects to see if they are “sufficiently stable” enough to qualify for funding, even if they don’t meet current requirements, Fannie Mae said in a statement.

These projects would get a “special approval” designation from Fannie Mae, clearing the way for hamstrung Florida lenders to originate loans and help spur a recovery, it said.