IT MAY BECOME IMPOSSIBLE TO GET A NEW MORTGAGE IN MANY CONDOS
By
Eric Glazer, Esq.
Published January 24, 2022
As if condos didn’t have enough
problems, Fannie Mae and Freddie Mac have just come out with new
guidelines that condos must follow.
Fannie Mae and Freddie Mac are
government-sponsored agencies that purchase large quantities of
home loans to keep money circulating throughout the home
mortgage economy. They won’t purchase these loans any longer
unless:
Delinquent assessments for Established Condominium Projects
No more than 15% of the total number of units in a project are
60 or more days delinquent in the payment of their HOA
assessments.
The Condo Must Have a Reserve Study
The reserve study must comply with the following requirements:
1.
The reserve study generally must include:
-
An inventory of major
components of the project
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Financial analysis and
evaluation of current reserve fund adequacy, and
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Proposed annual reserve
funding plan
2.
A reserve study’s financial analysis must validate that
the project has appropriately allocated the recommended reserve
funds to provide the Condominium Project with sufficient
financial protection comparable to Freddie Mac’s standard budget
requirements for replacement reserves
3.
The reserve study’s annual reserve funding plan, which
details total costs identified for replacement components, must
meet or exceed the study’s recommendation and conclusion
4.
The most current reserve study (or update) must be dated
within 36 months of the Seller’s determination that
a Condominium Project is eligible
5.
The reserve study must be prepared by an independent
expert skilled in performing such studies (such as a reserve
study professional, a construction engineer, a certified public
accountant who specializes in reserve studies or any
professional with demonstrated experience and knowledge in
completing reserve studies)
6.
The reserve study must meet or exceed requirements set
forth in any applicable state statutes
7.
The reserve study must comment favorably on the project’s
age, estimated remaining life, structural integrity and the
replacement of major components
If the Seller relies on a reserve study that meets the
requirements of this section, the project's budget must contain
appropriate allocations to support the costs identified in the
study.
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About
HOA & Condo Blog
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Eric Glazer graduated
from the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for three decades and is the owner of
Glazer and Sachs, P.A. a five attorney law firm with
offices in Fort Lauderdale and Orlando.
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Eric is Board Certified by The Florida Bar in
Condominium and Planned Development Law.
Since 2009, Eric has been the host of Condo Craze
and HOAs, a weekly one hour radio show that airs at 11:00 a.m.
each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
Eric is the first attorney in the State of
Florida that designed a course that certifies condominium and
HOA residents as eligible to serve on a Board of Directors and
has now certified more than 20,000 Floridians all across the
state. He is certified as a Circuit Court Mediator by The
Florida Supreme Court and has mediated dozens of disputes
between associations and unit owners. Eric also devotes
significant time to advancing legislation in the best interest
of Florida community association members.
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