Freddie Mac Makes Important Changes for Condos

Yesterday, Freddie Mac announced an important expansion of its Condo Project Advisor tool.  The changes will help smooth the condo review process for lenders working with condo buyers, but it will also allow HOAs to provide information about their project if it is missing.  These changes are an important step toward improving HOA's ability to comply with the new, more challenging requirements implemented in the wake of the Surfside building collapse.  NAR previously called for the GSEs to, "take a proactive role in helping to improve the availability and consistency of association documentation, financials and studies. This task would fit within their duty to serve the market."<o:p></o:p>

The changes to Condo Project Advisor include assigning all projects in Freddie Mac's database an approved or not-approved status.  This simple change allows lenders to see the status of condos Freddie Mac has previously reviewed.  If the project is approved, any lender can now use that status and there is no need to resubmit a costly and time-consuming review. Alternatively, a lender can submit information for review if the project is not approved.  Finally, if a project is about to lose its approved status, Freddie Mac will proactively reach out to the HOA to remedy and missing information.  Furthermore, if a project loses its status, the HOA, rather than the lender, can contest the change directly with Freddie Mac.  These three changes are significant, and NAR appreciates them. <o:p></o:p>

More can be done to help condo owners and buyers, though. Many projects in Freddie Mac's database are not approved and Freddie Mac should provide information on why.  These initial changes apply to large HOA projects for which Freddie Mac already has data.  In time, Freddie Mac should seek to expand the universe of projects for which it has information, especially to smaller HOAs where the cost of such review is a burden.  Finally, REALTORS are the tip of the spear in helping buyers close sales.  Allowing agents access to the Condo Project Advisor tool will help them asses the information needed for the buyer to obtain financing and work with HOAs to get that process started earlier.  <o:p></o:p>

NAR appreciates these important changes and Freddie Mac's willingness to engage and overcome these challenges.  We look forward to further collaboration.

Kenneth Fears
NATIONAL ASSOCIATION OF REALTORS®
Washington DC
202-383-1000