After the Surfside tragedy, FHFA issued temporary condo-lending rules. Those rules will change, and NAR is part of the discussions – but it can’t legally talk about it.
WASHINGTON – The National Association of Realtors® (NAR) says it’s actively involved in group discussions on condominium-financing rules with the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the GSEs), but can’t talk about it due to a non-disclosure agreement (NDA).
The discussion relates to the condominium collapse tragedy in Surfside, Florida. Following that, FHFA – which has oversight of Fannie Mae and Freddie Mac – developed temporary guidance on condo purchase requirements.
It’s now considering more permanent rules, and the National Association of Realtors® (NAR) says it’s been part of those discussions since the beginning in 2022 under the NDA.
However, NAR along with two other housing groups – Community Associations Institute (CAI) and Community Home Lenders of America (CHLA) – want more transparency in the process. This week, they wrote a letter to FHFA Director Sandra L. Thompson, Fannie Mae CEO Priscilla Almodovar and Freddie Mac CEO Michael J. DeVito, requesting that transparency.
“Our organizations are very concerned that the GSE condominium and housing cooperative lending requirements will restrict access to housing for many Americans, while making it very difficult for current owners to build wealth and maintain their property values,” the group says in the letter.
It notes the increased attention to condo building maintenance issues after Surfside, but “restricting access to lending will plummet property values leaving less money and incentive for homeowners to invest in maintenance, especially in urban opportunity zones throughout the U.S.”
The group calls it a “potential housing crisis” and hopes the final rule will “narrow the focus of these requirements to the buildings that are at risk based on data.”
The group specifically asks that:
• Any changes to (Fannie, Freddie) condo project or loan approval requirements should be subject to a public comment period of at least 60 days prior to adoption.
• Fannie Mae should be required to make public their lists of condo projects ineligible for loan purchase, along with guidance as to the actions necessary to make them eligible.
“We stand ready to work with GSEs and FHFA to develop and implement policy to keep Americans safe in their buildings while having appropriate access to lending for their homes,” the group concludes in the letter.
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