Fannie Mae announced Tuesday that it is implementing a new ‘Special Approval’ designation for Florida condo projects that may not meet its standard eligibility requirements for financing.
‘The deterioration in the market for individual units in condominium projects in many parts of the country has been especially pronounced in Florida,’ the company said in a letter to lenders, noting that many condos that initially met its eligibility requirements may no longer be eligible, "potentially limiting access to mortgage financing."
Under the new Special Approval process, Fannie Mae will review projects that lenders suggest may qualify. The designation is provided only for newly originated purchase transactions and refinances of existing Fannie-owned or -securitized mortgages.
Special Approval designations will be effective for periods between 9 and 18 months. Lenders must confirm the project's Special Approval designation on the date of the loan application for the loan to be eligible for delivery to Fannie Mae.
All mortgage loans secured by units in projects with the Special Approval designation must be delivered no later than three months following the expiration date of the project's Special Approval designation.
SOURCE: Fannie Mae