Condominium buyers may face higher costs and documentation demands under new lending rules from Fannie Mae and Freddie Mac.
For loan applications dated on or after Aug. 3, Fannie Mae will eliminate its Limited Review process, while Freddie Mac will retire its comparable Streamlined Review option. Those abbreviated reviews had allowed certain mortgages in established condominium projects to qualify with less extensive scrutiny.
Loans that previously qualified for those streamlined processes will generally require a full review unless they are eligible for a waiver or another permitted review method.
A full review involves a more comprehensive assessment of the condominium association’s finances, reserve funding, insurance coverage, and the property’s physical condition before a mortgage can be sold to Fannie Mae or Freddie Mac….