Fannie Mae Condominium Owner Occupancy Ratio Requirements

The comprehensive review process is a method of reviewing new and established condominium projects, collaborative projects and specific prefabricated housing projects. Lenders conducting a full review must ensure that the project meets all applicable eligibility requirements. specific requirements for the project review methodology used to determine the eligibility of the project; Projects that limit the owner`s ability to occupy the unit, even if the project is not operated as a motel or hotel; and legal and registered documents, including agreements, conditions and restrictions, the declaration of co-ownership or other similar documents that establish the legal structure of the project; Projects where the HOA or co-operative society is designated as a party to an ongoing litigation, or where the proponent or proponent of the project is designated as a party to an ongoing litigation regarding the safety, structural strength, habitability or functional use of the project, are not sold to Fannie Mae. Projects that contain apartment buildings are not allowed. These projects allow an owner to hold the property (or the property and associated occupancy rights) in a single legal entity divided into several residential buildings within the single legal entity, with ownership of the unit (or shares) being proven by a single deed and financed by a single mortgage (or share loan). Subdivided units are not separate legal entities. This restriction applies whether the owner maintains one or more of the subdivided units as rental units or uses one or more of the subdivided units as accessory or blocking units. Can be excluded from the calculation of exclusive ownership: 75% or more of the units are in possession of an investment and a second home - especially if the loan transaction is not a principal residence transaction; are intended for the exclusive use of the owners of the accommodation unit (such as. B a fitness centre, swimming pool, common room and laundry room); and the FHA requires all adjoining condominiums to be approved by hud. Site condominiums do not need to be approved by the FHA. The study meets Fannie Mae`s requirements for replacement reserve studies listed at the end of this section.

Slides, cabins and other amenities are allowed if they are jointly owned by the owners of the unit under the HOA. Ground lease exclusion units are units whose structure is owned by an individual, but the land is leased by the HOA or the project developer. These units were not converted to condominiums when the project was converted to a condominium regime. Since July 2012, a flood of condominiums has been seized in recent years due to speculative investments and unfavorable mortgages. When the housing bubble burst around 2007, condominium foreclosures plunged Fannie Mae, the nation`s largest mortgage buyer, into a downward spiral. The result was the implementation of the new credit requirement for condominium acquisition in 2009. Fannie Mae needed to be assured that the surrounding units and communities were financially healthy before approving mortgages. Project eligibility risk is a different risk from the credit risk of individual borrowers. Entities involved in a project carry risks that are also different from the risks associated with properties that are not part of an owner association (HOA) or project. These risks include: has received a hotel or resort rating for its hotel, motel or resort operations through hotel review providers, including but not limited to travel agents, hotel booking websites and Internet search engines. The assessment will not be completed, with the exception of certain basic requirements that apply. These changes have been around since 2008, believe it or not, but have been overlooked by many lenders and therefore not brought to the attention of brokers.

These occupancy ratio requirements for Fannie Mae condominium owners should make it much easier for brokers to move some of these low-end condos that they thought they could not get financing. Now that the occupancy rate of 51% of owner-occupied dwellings no longer exists and has been changed in the way it is calculated for non-owner-occupied dwellings, there is no reason not to sell these listings. "common property" dwellings or community housing projects, which are projects or buildings owned by several owners as co-tenants or by an association in which individuals have an undivided interest in a residential building and land and have the right to use only a particular dwelling in the building; A condominium or co-op unit with an accessory unit may be eligible on a case-by-case basis with a PERS fannie Mae project approval or a waiver of project eligibility at the loan level. .