The following was written by Dawn Bauman, CAE on April 14, 2022 and recommended by Senior Partner Charlie Perkins:
Updated lending questionnaires from Fannie Mae and Freddie Mac with new project requirements for condominiums and housing cooperatives to ensure structural safety have caught community association boards, managers, and business partners by surprise, as we reported in February. CAI continues to have conversations with the government-sponsored enterprises and their conservator, the Federal Housing Finance Agency (FHFA), to urge changes to the lending requirements and timeline for implementation.
To demonstrate the impact of these requirements on community associations, CAI conducted an impact survey asking homeowner leaders, community managers, and management company executives how these requirements have affected real estate transactions in their communities. We received more than 500 responses from CAI members across 36 states. Some of the highlights are listed below:
- Ninety percent of the respondents represent condominiums and 11% represent housing cooperatives.
- Seventy-two percent of respondents say they have been impacted by the updated Fannie Mae and Freddie Mac lending guidelines.
- Between 22–28% of respondents indicate they experienced a lender denial due to issues related to the questionnaire, not concerns pertaining to building safety.
- Around 30–42% of respondents indicate they have experienced significant delays in lender approval due to challenges pertaining to the new lender questionnaires.
Find the full impact survey results here.
In addition to Fannie Mae and Freddie Mac representatives, CAI also is engaging in conversations with members from other national organizations, including real estate agents and mortgage bankers, to urge changes to the requirements. Specifically, we’ve urged Fannie Mae and Freddie Mac to narrow the scope of which buildings are at higher risk and may need additional information/review, have asked the enterprises to change or eliminate certain questions that community association representatives do not have the knowledge and information to respond, and other factors. For more information about CAI’s request to Fannie Mae, Freddie Mac, and FHFA, review our comment letter here.
While we remain optimistic that changes are on the horizon, we understand that this type of policy to address these challenging issues takes time. CAI developed a guidance document to help homeowner leaders and managers navigate the current lending requirements in their communities, and you can follow the CAI Advocacy Blog for additional updates on this important issue.