Fannie Mae Special Approval List for Condo Developments Nears 200
Fannie Mae has designated 181 condominium developments in Florida for special approval to give financing to homebuyers since the program launched in January 2010.
Ocean’s Edge, a community of condo developments in Jacksonville Beach, Fla., was the latest to receive special approval this week. Fannie launched a review of hundreds of Florida condo projects at the beginning of the year following the collapse of that market. A full list of the approvals can be found here.
Projects deemed to be "sufficiently stable" after the review are given a special approval designation, which means lenders originate and provide mortgage loans secured by these units to Fannie Mae. A team of six Fannie Mae employees conducts the reviews.
There were 670,000 condominium and co-op sales nationally in June, down 1.5% from May but 20.5% higher than last year, according to the National Association of Realtors (NAR).
After Fannie Mae launched special approval program in January, the Federal Housing Administration (FHA) eliminated its spot-approval process in Februrary in a move to tighten lending to these projects.
In order to get FHA lending for a condo, an investor cannot own more than 10% of a single set of units, and at least half of the units must be sold before any mortgage on a unit can be endorsed.
To get approval from Fannie, Ocean’s Edge had to prove the condo association was financially healthy and current residents were up to date on their condo dues. It had to be primarily made up of owner-occupants and second homeowners rather than investors, and it had to show low defaults and delinquencies.
"Without Fannie Mae approval, lenders simply aren't offering conventional mortgages in Florida condominiums," said Vikki Robbins, partner of Pace Builder Services, the real estate company that conducts sales and marketing at Ocean’s Edge. "That is why this approval is so important."
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