TheMReport — News and strategies for the evolving mortgage marketplace.
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M R EP O RT | 35 FEATURE not be living here." • "No one gets Fannie Mae/ Freddie Mac/FHA loans in this building. The average sales price is much higher than agency loan limits will allow." • "Why don't we churn the same $150,000 we have in reserves? Take it out of one account, add it to another, and pretend that we are following the guideline." Suffice to say, issues involving condo and co-op project mainte- nance are exceedingly complex, even in the best of times. So, let us discuss how to uncomplicate these issues. Just the Facts H ere are three basic facts about condo and co-op lending in 2022. Regardless of how you or I feel about them personally, they present the truth of where we are today: • Fannie Mae and Freddie Mac's new lending guidelines are meant to ensure that homeowners are made aware of possible structural and mechanical issues in the build- ings they own or are buying units in. • All condo and co-op lending has been impacted by the re- lease of these guidelines. This includes conforming agency mortgage lending, jumbo mortgage lending, underlying mortgage lending for coopera- tives, and lines of credit for condo properties. • For mortgage financing to be available to borrowers in condo and co-op properties, property managers and board members must immediately do sev- eral things: adopt new reserve funding policies, abandon the special assessment repair fund- ing method, complete needed structural and mechanical component repairs, and obtain an engineering inspection and/ or reserve study to determine component condition and capi- tal requirements. Suffice to say, issues involving condo and co-op project maintenance are exceedingly complex, even in the best of times.