Fannie Mae Launches Special Approval Designation to Support Florida Condo Market
January 12, 2010
Fannie Mae is undertaking a review of hundreds of condominium projects in Florida in an effort to allow additional projects to become Fannie Mae-eligible through a new "Special Approval" designation.
A team of six Fannie Mae professionals based in Florida is conducting an 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 examination are granted a Special Approval designation, meaning lenders can originate and deliver mortgage loans secured by units in these projects to Fannie Mae.
Fannie Mae has been granting exceptions to its condominium eligibility guidelines on a case-by-case basis when requested by lenders. The Special Approval designation streamlines the process for lenders and catalogues projects across the state that are Fannie Mae-eligible. Projects deemed eligible will be listed on www.eFannieMae.com as project reviews are completed, and qualified borrowers wishing to purchase units in these projects will be eligible for financing.
"This new initiative is geared toward providing maximum support for Florida's distressed condo market as we continue to provide liquidity to the housing market more broadly," said Karen Pallotta, Executive Vice President, Single Family Mortgage Business. "The state's condo market has been particularly hard hit by the housing downturn and we're working with the industry and our partners to do all we can to stabilize the market and help spur recovery."
Special Approval designations are effective for periods between 9 and 18 months, and lenders are required to confirm the project's Special Approval designation on the date of the loan application. The Special Approval initiative is for established condominium projects only.