Read more: CondoTek executive: New condo rules ‘hard to swallow’ Because of this risk, Horn said Fannie Mae is making many of these temporary provisions permanent as part of its recently updated policies to address projects that need critical repairs, and projects that have material deficiencies (eg large deferred maintenance), and special appraisals for projects with five or more attached units. Fannie will now require developers to disclose significant repairs needed and significant deferred maintenance that may affect the safety, integrity, structural integrity or habitability of an apartment or co-op unit or the project as a whole and its amenities. In addition, GSE will not purchase unit-secured loans in residential and co-op projects that require significant repairs or that require significant unresolved deferred maintenance until the required repairs are made. Fannie Mae has also adopted a policy requiring lenders to rate special valuations, including the reason for the valuation and the unitholders’ ability to make valuation payments in a timely manner. “The updated condo and co-op requirements are designed not only to protect lenders and Fannie Mae from a risk management perspective, but also to protect borrowers from projects that are physically insecure or financially unstable, which can translate to skyrocketing costs of home ownership,” Horne wrote in a blog post. Released on Fanny’s website. “Together, these policies promote safe and sustainable home ownership.”
