On January 7, 2010 Fannie Mae launched the new "Special Approval" designation for Florida condo projects that meet their new revised criteria.  The revised criteria has been set up by Fannie Mae in an attempt to get the Florida condo market moving again by reducing the difficulty associated with financing condos in Florida. 

Obtaining financing for condo projects other than those already on the HUD/FHA Condo Approved List has been very difficult up to this point.  This appears to have been caused by lenders unwillingness to finance projects that do not meet basic requirements including having no more than 15% delinquency rates and having a minimum of 6 months worth of operating budget in the association's reserve account.  Many condos in South Florida have struggled with this issue because their reserves have often times been used to float the buildings expenses while dealing with mounting maintenance deficiencies caused by owners not paying their monthly maintenance fees.  This problem has been compounded by the growing number of condominium short sales and foreclosures in the market.

The good news is that Fannie Mae's new Special Approval designation program may help to move condos from being un-financable to being able to be financed again.  In order to do so, Fannie Mae is undertaking a comprehensive review of hundreds of condominium projects in the Florida to determine if the condo meets the new revised guidelines.  The process will include assessing specific criteria more closely, including occupancy, home ownership, association dues, financial stability of the project and property condition.  Projects deemed to be sufficiently stable following closer examination will be granted the Special Approval designation, meaning lenders can originate and deliver mortgage loans secured by units in these projects to Fannie Mae.  Projects deemed eligible will be listed on www.eFannieMae.com as projects reviews are completed.  Then qualified borrowers wishing to purchase units in the approved condo projects will be eligible for financing. 

For more information on purchasing condos in South Florida contact the Willard Realty Team at 305-332-8330.