AC-019 Conventional Underwriting Guideline Updates
This bulletin provides a summary of important updates being made to several sections of FLCBank’s conventional underwriting guidelines.
Condominium Project Review Requirement Updates
Fannie Mae and Freddie Mac announced they are making the temporary policies for project review addressing projects in need of critical repairs, deferred maintenance and special assessment permanent policy starting with new loan applications dated on or after September 18, 2023, for units located in Condominium Project with ≥ 5 attached units regardless of the project review type.
In addition to the temporary requirements becoming permanent policy, the following are new condo policy requirements that must be complied with starting with loan applications dated on or after September 18, 2023:
- Critical Repairs: Defined as material deficiencies and significant deferred maintenance items.
Loans secured by a condominium in a project with any unfunded repairs costing more than $10,000 per unit that should be undertaken within the next 12 months are not eligible. Does not include repairs made by the unit owner or repairs funded through a special assessment.
- Inspection Reports: If a structural and/or mechanical inspection was completed within 3 years of the lender’s project review date, the lender must obtain and review the inspection report. The report cannot indicate that any critical repairs are needed, no evacuation orders are in effect, and no regulatory actions are required.
- Delinquent Special Assessments: For Limited and Full Reviews, no more than 15% of the total units in a project are 60 days or more past due in the payment of each special assessment.
- Fannie Mae Project Review Waiver: When the project review is waived on a Fannie Mae loan per permissible policy, the Lender must confirm the project is not in Condo Project Manager (CPM)…..READ MORE