Freddie Mac has announced some changes for automated inquiries about the status of collateral properties submitted to its
Lenders will be prompted with automated messaging that suggests when a building should be submitted for possible
There are still limits to what building requirements get signed off on in the new PC certification, but it does minimize the follow-up underwriting that needs to be done.
Project certified is one of the multiple responses lenders may receive when entering a building's details in the government-related mortgage investor's technology platform. The others are: green, yellow, incomplete assessment or not eligible. Other responses still require full underwriting.
If lenders get the "not eligible" response, which Freddie said is rare, starting on Feb. 26 they or the homeowners association may be able to submit an appeal that was not possible before.
Freddie Mac has no charge associated with automated inquiries, new prompts or the appeal.
"We are committed to continuing to find ways to help streamline condo loan originations, while helping lenders ensure that condo homebuyers are put on a path of sustainable and successful homeownership in condo communities," said Tanya DeLia, single-family vice president of collateral risk management at Freddie Mac, in an email.
One trade group that has had concerns about the hurdles to condo financing in the past, the Community Home Lenders of America, issued a statement welcoming Freddie's new moves, noting that they are in line with past requests for more transparency and eligibility options.
"Today's action by Freddie Mac tracks recommendations made in a joint letter by CHLA, the National Association of Realtors and the Community Associations Institute in June," the group said in a press release.
The CAI released a similar press release, noting that Freddie's new options come at a time when the institute's members are contending with building maintenance and insurance challenges, and that it is watching to see if the changes will help with unit financing.
"CAI is extremely pleased to see this level of transparency by Freddie Mac and is encouraged by this step forward to provide solutions for condominium projects' access to lending," the institute said.
Homeowner associations have had concerns about the difficulty obtaining information about a building or remedying a status that barred loans on individual units in the past not only due to the impact of would-be buyers, but the related impact on the building's larger finances.
The National Association of Realtors also welcomed the developments at Freddie Mac for that reason, saying that they were in line with moves the group has been recommending since 2021.
"These changes are important steps to improve the HOA's ability to meet the more stringent requirements put in place after the Surfside building collapse," the association said in a press release.
