In June of 2018, Fannie Mae made some changes to their condo guidelines that will increase the number of eligible projects. Noteworthy changes included the following:
- Investment properties are now eligible for a “Limited Review” with a 75% LTV/CLTV.
- Two-to-Four Unit condos no longer require a project review, with the exception of some basic requirements:
- Must meet property eligibility and insurance requirements; and
- No more than 6 months of common expenses can have a priority lien (standard)
- Condotels are now more clearly defined. The project is not a condotel if it does not:
- Have a license or is being managed as a hotel or hospitality entity;
- Restrict the owner’s ability to occupy the unit;
- Require owners to rent their unit in anyway; or
- If they do rent, require owners to share their profits with the HOA, management company, resort, or hotel affiliated rental company.
Note: Conforming & Jumbo investors generally follow Fannie Mae, however it is always best practice to check for overlays.