Recent lending guideline changes were released by both Fannie Mae and Freddie Mac on July 5th 2023. Effective September 18th, 2023 Fannie Mae returns to previous guidelines and allows for the utilization of a Reserve Study to prescribe appropriate reserve funding for both new and established condo and co-op properties. This is big news for condo/co-op properties that have amassed sizable reserve capital but don’t budget annually for a 10% reserve contribution.
These new lending requirements require available engineering reports and reserve studies to be presented for analysis to prove that condo and co-op properties are adequately managing structural and mechanical component repair and replacement. More importantly, the agencies are focusing on the requirement for substantial amassed capital reserves to ensure that homeowners are protected from the new trend of levying a special assessment when repairs are needed to be made instead of utilizing reserved funds.
Hear from Orest Tomaselli, President of Strategic Inspections and President of Project Review at CondoTek in a 30 minute industry webinar where he outlines new policy and lending requirements for property managers, board members, originators, attorneys and lenders.
Fannie Mae Guideline Update Link:
Freddie Mac Guideline Update Link:
Link to listen to webinar: