Freddie Mac announced yesterday, December 6, 2023, that it would be implementing steps to increase transparency in condominium project certification and eligibility for loans. See the link to Freddie Mac’s announcement.
Up to now, industry leaders have voiced concerns about the secretive nature of Freddie Mac’s determination of a condominium’s eligibility status—contending that its unavailable list of condominiums amounted to a secret blacklist. For prospective home buyers wanting to buy in a condominium, this has meant that there was less access to mortgages, sometimes causing serious problems because existing condominium owners, boards of directors, and community managers didn’t know that the condominium was ineligible. As a result, the ability to buy and sell units in these condominiums was negatively impacted, further impacting property values and access to affordable housing.
Freddie Mac’s announcement provided that for those condominiums that are determined to be ineligible, an appeal process will be available for authorized homeowners association representatives. Starting February 26, 2024, those condominiums determined to be ineligible for loans backed by Freddie Mac will be able to have access to specific information about that status and the ability to appeal it.
This announcement is a positive development and it is hoped that Fannie Mae will have a similar announcement in the near future. We will provide further updates as they occur.