Updates to Fannie Mae condo, co-op, and Planned Unite Development (PUD) project policies
In response to lenders’ input, Fannie Mae has made several updates to their condo, co-op, and Planned Unit Development (PUD) project policies which are designed to increase flexibilities when originating loans secured by units in a project. New Jersey lenders are now tasked to apply the policy revisions to legal documents and terms to best meet the needs of community associations in New Jersey. Likewise, community association boards and administrators should have legal counsel review any new legal contracts in keeping with the best interests of the association.
Outlined in the Fannie Mae Selling Guide announcement, the Project Standards Updates are extensive, affording more opportunities for lenders and community associations. Areas of revision include: single-entity ownership, commercial space, established project definition, investment property transactions, FHA project review, two- to four-unit condo projects, projects consisting of manufactured homes, legal non-conforming zoning, projects operating as a hotel or motel (Condotel policy), live-work condo projects, and limited equity co-ops. Lenders are authorized to apply the changes immediately, and Fannie Mae systems will start to be updated with the new content as of June 23, 2018 and continuing through August 1, 2018.
The areas of revision outlined above will impact eligibility, procedures, and the legal documents required to be prepared for various lending transactions. Your community association should seek legal counsel that is up-to-date on emerging standards and requirements to gain the best advantage in these emerging opportunities.