NAR supports Freddie Mac's push for efficient condo financing
Freddie Mac recently updated its Condo Project Advisor tool to streamline condominium financing, a move applauded by the National Association of Realtors (NAR).
The tool allows lenders to quickly verify if condo units meet Freddie Mac’s financing guidelines. The updates include a simple three-step process for lenders to request “Project Certified” status, which indicates minimal project underwriting needed, and a system for flagging potential eligibility issues with condo projects.
These changes are part of Freddie Mac’s efforts to provide clarity around issues impacting condo loan delivery and potentially reducing condo-related repurchase request costs and time for lenders and borrowers.
“Condominiums provide a key path to homeownership, particularly for first-time and low-income homebuyers,” said Tanya DeLia, vice president of collateral risk management at Freddie Mac Single-Family. “Considering the challenges facing the housing market currently, it should come as no surprise that condo financing is especially critical.”
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The process for requesting Project Certified status involves entering basic details like zip code and project name, with immediate feedback on whether the project meets the requirements or if there are issues potentially rendering it ineligible. These issues might include condominium hotel features, excessive commercial space, or single investor concentration.
A Project Assessment Request (PAR) finding will provide lenders with clear statuses like Project Certified, Green, Yellow, Incomplete Assessment, or Not Eligible, guiding their review process early in the origination stage. For projects assigned a “Not Eligible” status, homeowner association (HOA) representatives and lenders can appeal the process with Freddie Mac.
“These new Condo Project Advisor enhancements provide immediate, transparent and actionable feedback so lenders and HOA representatives can take the necessary steps to ensure more individuals and families can achieve long-term sustainable homeownership,” DeLia said.
Commenting on the new process, NAR president Tracy Kasper said in a statement: “These changes are important steps to improve the HOA’s ability to meet the more stringent requirements put in place after the Surfside building collapse. NAR appreciates these important changes and Freddie Mac’s willingness to address these challenges proactively. We look forward to further collaboration and continuing to streamline processes for real estate professionals in the future.”
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