Condo Media - March 2022 - 16

Asked & Answered
Fannie Mae, Condo Loans,
and Maintenance
Board Role and Responsibility to
Address Deferred Maintenance
Why is my condominium board
spending money on maintenance
that they hadn't done before
and telling us it is a Fannie Mae
requirement? What does that
mean? Does the board have the
right to maintain common areas?
Shouldn't the owners vote if the
roof needs to be repaired?
In October 2021, Fannie Mae issued a letter
regarding its requirement for lenders to determine
what loans will be eligible for purchase. Fannie Mae
purchases a huge portion of the loans in this country,
so many lenders are affected. It also appears
that non-Fannie Mae lenders are following suit,
so this issue couldn't be more widespread.
As a result of this letter, condominium associations
nationwide have been put on notice that
deferred maintenance will no longer be acceptable.
Boards in the past often tried to keep condominium
fees low in order to make their association more
marketable. As a result, many maintenance projects
were deferred. This is likely what partially
caused the collapse of the condominium building
in Florida last year. That collapse caused lenders
to reevaluate what they should be concerned with
when making a loan.
Boards can no longer defer maintenance like
many did in the past without risking loans being
declined. Of course, loans being declined would
impact the value of units much more than an
artifi cially low condominium fee.
16 CONDOMEDIA March 2022
ANSWERING LENDER QUESTIONS
Lenders throughout the country have revised the condominium
questionnaires that they are obtaining in order
to fi nance or refi nance condominiums. Those questions
now concern deferred maintenance risks. They will also
ask about evacuations, projects with substantial damages,
buildings that need substantial repairs, or associations
that fail to obtain a certifi cate of occupancy and
fail to pass local regulatory inspections. These questions
cannot easily be answered by the association or their
manager without risks of liability. It is recommended
that these questions not be answered unless the association
defi nitely knows the answer to the question. A more
appropriate response is, " This question is overly broad
and beyond the scope of what the board and/or manager
can answer. Lender can perform its own investigation. "
However, it is the fact that these questions now exist that
is putting associations on notice that these concerns by
the lending community must be addressed in the future.
Otherwise, the association may run into the problem
that owners cannot obtain fi nancing. Obviously, that
would be disastrous for the association and for the value
of all of the units.

Condo Media - March 2022

Table of Contents for the Digital Edition of Condo Media - March 2022

Contents
Condo Media - March 2022 - Intro
Condo Media - March 2022 - Cover1
Condo Media - March 2022 - Cover2
Condo Media - March 2022 - Contents
Condo Media - March 2022 - 2
Condo Media - March 2022 - 3
Condo Media - March 2022 - 4
Condo Media - March 2022 - 5
Condo Media - March 2022 - 6
Condo Media - March 2022 - 7
Condo Media - March 2022 - 8
Condo Media - March 2022 - CT1
Condo Media - March 2022 - CT2
Condo Media - March 2022 - 9
Condo Media - March 2022 - 10
Condo Media - March 2022 - 11
Condo Media - March 2022 - 12
Condo Media - March 2022 - 13
Condo Media - March 2022 - 14
Condo Media - March 2022 - 15
Condo Media - March 2022 - 16
Condo Media - March 2022 - 17
Condo Media - March 2022 - 18
Condo Media - March 2022 - 19
Condo Media - March 2022 - 20
Condo Media - March 2022 - 21
Condo Media - March 2022 - 22
Condo Media - March 2022 - 23
Condo Media - March 2022 - 24
Condo Media - March 2022 - 25
Condo Media - March 2022 - 26
Condo Media - March 2022 - 27
Condo Media - March 2022 - 28
Condo Media - March 2022 - 29
Condo Media - March 2022 - 30
Condo Media - March 2022 - 31
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Condo Media - March 2022 - 33
Condo Media - March 2022 - 34
Condo Media - March 2022 - 35
Condo Media - March 2022 - 36
Condo Media - March 2022 - 37
Condo Media - March 2022 - 38
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Condo Media - March 2022 - 40
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Condo Media - March 2022 - 42
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Condo Media - March 2022 - 45
Condo Media - March 2022 - 46
Condo Media - March 2022 - 47
Condo Media - March 2022 - 48
Condo Media - March 2022 - Cover3
Condo Media - March 2022 - Cover4
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