top of page

Understanding Fannie Mae Condo Guidelines: A Comprehensive Guide

Updated: Jun 2

Understanding Fannie Mae Condo Guidelines: A Comprehensive Guide

In this guide, we will explore Fannie Mae condo guidelines and their importance in the mortgage process. Fannie Mae guidelines play a crucial role in determining the eligibility of condominium loans and other types of mortgages such as conventional, FHA, and VA loans.  

At Bennett Capital Partners Mortgage, we specialize in helping clients understand and navigate these guidelines to secure the best financing options.Understanding these guidelines can help both first-time homebuyers and experienced investors navigate the complexities of purchasing a condominium unit.

Continue reading to learn how we can assist you in finding the perfect loan for your condominium purchase.

Key Takeaways

Fannie Mae has specific eligibility requirements for condo projects, including owner-occupancy ratios, delinquent assessment limits, and project completion thresholds.

Condos may require a full or limited condo project review depending on factors like owner-occupancy, litigation, and developer control.

Ineligible condo features include high single-entity ownership, insufficient reserves, excessive commercial space, incomplete phasing, and ongoing litigation.

Working with an experienced mortgage broker like Bennett Capital Partners can help navigate the complex Fannie Mae condo guidelines and secure financing for your condo purchase.

Table of Contents

Fannie Mae Condo Guidelines - Factors Impacting Your Review Type

Factors Impacting Your Review Type

When considering a condominium purchase, understanding the various factors that impact the review type is essential for a smooth and successful transaction. These factors can influence the type of review (full or limited) and ultimately determine the eligibility of the condominium for Fannie Mae financing. In this section, we will explore several factors that can impact the review type for a condominium purchase with conventional condo guidelines.

1. Owner Occupancy Ratio

The owner-occupancy ratio is a crucial factor that can impact the review type. Fannie Mae requires a certain percentage of units in a condominium project to be owner-occupied or designated as primary residences. If the owner-occupancy ratio is too low, it may signal that the condominium project has a high percentage of investor-owned units, which can increase the risk associated with the loan. Consequently, the lender may opt for a full review instead of a limited review.

2. Delinquent Homeowners Association (HOA) Dues

Another factor that can impact the review type is the percentage of delinquent HOA dues. High delinquency rates can indicate that the condominium project is not financially stable. This can lead to a lack of funds for essential maintenance and repairs, which can negatively impact property values. Fannie Mae requires that no more than 15% of units in a condominium project be more than 60 days delinquent on their HOA dues. If the delinquency rate is too high, a full review may be necessary to further assess the financial health of the project.

3. Project Litigation

The presence of ongoing litigation involving the condominium project can also influence the review type. Litigation can range from disputes between the developer and the HOA to personal injury claims involving common areas. Depending on the nature and scope of the litigation, it may present a significant financial risk to the project, which can affect the condominium's eligibility for Fannie Mae financing. In such cases, a full review may be necessary to evaluate the potential impact of the litigation on the project's financial stability and overall viability.

4. Adequate Insurance Coverage

Fannie Mae requires that condominium projects maintain adequate insurance coverage to protect the interests of homeowners and lenders. This insurance requirement includes hazard, flood, liability, and fidelity insurance, among others. If a condominium project does not meet Fannie Mae's insurance requirements, it may necessitate a full review to further evaluate the project's risk profile and determine if additional coverage is necessary.

5. Reserve Fund Levels

The level of reserves maintained by the condominium project is another important factor that can impact the review type. A well-funded reserve account is essential for covering the costs of ongoing maintenance, repairs, and capital improvements. If the reserve fund is insufficient, it can signal potential financial instability and may result in a full review.

6. Developer Control

If the developer still maintains control over the condominium project, it may impact the review type. Fannie Mae typically requires that a certain percentage of units be sold and under the control of the unit owners before the project is eligible for financing. This is to ensure that the developer has a vested interest in the project's long-term success and to protect homeowners from potential mismanagement. If the developer maintains control over a significant percentage of units, a full review may be necessary.

7. Special Assessments

Special assessments are fees levied by the HOA to cover the costs of significant repairs, improvements, or other expenses that exceed the reserves' capacity. The presence of special assessments can impact the project eligibility and review type, as they may indicate financial instability or the need for costly repairs that could affect property values. A full project review may be necessary to assess the scope of the special assessments and their potential impact on the project's financial health.

Full vs. Limited ReviewCondo Approvals

Full vs. Limited Condo Approvals

When it comes to condo financing, there are two main types of approvals: full and limited. Both types of approvals have their own set of requirements and are suitable for different scenarios. In this section, we will explore the differences between full and limited condo approvals and how they relate to various mortgage programs offered by Bennett Capital Partners.

Full Condo Approval

Full condo approval is a more comprehensive review process that evaluates the overall financial health, structural integrity, and governance of a condominium building or project. This type of approval is generally required for non-warrantable condos, condo-tels, and new or newly converted and-converted condo projects. Full condo approval is also necessary for certain mortgage programs, such as FHA, VA, and USDA loans.

Full condo approvals involve a thorough evaluation of the condo project review it's budget, legal documents, established project name, insurance coverage, reserve accounts, and more. The process can be time-consuming, but it provides a higher level of assurance to lenders and home purchasers regarding the condo project review it's eligibility for financing.

Limited Condo Approval

Limited condo approval, also known as a streamlined review, is a less rigorous process typically used for well-established condominium projects that meet specific eligibility requirements. This type of approval is suitable for conventional mortgages, jumbo mortgages, and some non-QM mortgages.

During a limited review, the lender's review primarily focuses on the individual condo unit being financed, the borrower's creditworthiness, and basic project information. The main benefit of a Limited Review is no budget is asked for. Limited condo approvals are generally faster and less expensive than full approvals, making them a more attractive option.

Choosing the Right Condo Approval Type

The type of condo approval required for your transaction will depend on several factors, such as the specific condominium project, the type of mortgage program you're pursuing, and the lender's requirements. Your broker at Bennett Capital Partners will provide hands-on guidance and help you determine the right condo approval type for the loan program desired.

At Bennett Capital Partners, we offer a wide range of mortgage programs tailored to meet the unique needs of our clients. Whether you're a foreign national looking to invest in a condominium or a homeowner seeking renovation loans for your condo unit, our team of experts is here to help you navigate the condo approval process. We also specialize in construction loans, profit and loss only, land lot loans, and multi-family 5+ unit mortgages.

To get started, request a quick quote or apply for pre-approval online. Our experienced mortgage professionals will work closely with you to determine the best financing solution for your condominium purchase.

Resources for Condo Buyers

Navigating the world of condominium financing can be challenging, especially for first-time buyers or those unfamiliar with the intricacies and new requirements of the approval process. Bennett Capital Partners offers a variety of resources to help educate and guide our clients through this complex landscape.

➡️ Use our mortgage calculator to estimate your monthly payments and determine how much you can afford.

➡️ Stay up-to-date with the latest industry news and trends by subscribing to our newsletter.

➡️ Learn about the different types of mortgage programs we offer, including commercial mortgages, bank statement programs, private lending, hard money mortgages and jumbo loans

➡️ Explore our HomePath mortgage program, which provides financing options for Fannie Mae-owned properties.

By leveraging our resources and working with our experienced mortgage professionals, you'll be better equipped to navigate and complete the condo approval process and secure the financing you need for your dream condominium.

Eligibility Requirements for Fannie Mae Condos

Eligibility Requirements for Fannie Mae

When purchasing a condo, it's essential to be aware of the eligibility requirements set forth by Fannie Mae. Meeting these criteria can help streamline the approval process and increase the likelihood of securing a mortgage for your desired condominium. In this section, we will discuss the various eligibility requirements for Fannie Mae-approved condos and how they relate to different mortgage products offered by Bennett Capital Partners, such as conventional mortgages, non-QM mortgages, and foreign national mortgages.

Project Eligibility Review Service (PERS)

Fannie Mae requires some condominium projects to undergo a Project Eligibility Review Service (PERS) before they can be eligible for financing. This review process is designed to ensure that the project meets Fannie Mae's guidelines regarding financial stability, legal structure, and other factors. Condominium projects that may require PERS review include:

Newly converted condo projects

Projects with significant legal or financial issues

Projects with non-traditional ownership structures, such as co-ops or condo-tels

Projects with more than 20% commercial space

Owner-Occupancy Ratio

Fannie Mae requires a minimum owner-occupancy ratio for established condo projects. This means that a certain percentage of the units in the project must be owner-occupied or, in some cases, second homes. The specific owner-occupancy requirements may vary depending on the type of mortgage product being used, such as FHA mortgages, VA mortgages, or USDA mortgages.

Delinquent Assessment Ratio

Fannie Mae also requires that no more than 15% of the total units in a condo project have delinquent assessments (unpaid homeowners association dues) at the time of loan application. Delinquent assessments can be an indicator of financial instability within the project and may result in a higher risk for the lender.

Single Entity Ownership

Fannie Mae imposes limits on the percentage and unit type of units that can be owned by a single entity within a condominium project. The specific limits depend on the total number of units in the project, but generally, a single entity cannot own more than 10% of the units in a project with 21 or more units.

New Construction and Phasing Requirements

For newly constructed or phased condominium projects, Fannie Mae has specific requirements related to project completion and the sale of units. These requirements help ensure that the project is financially stable and has a healthy owner-occupancy ratio. Projects must meet certain pre-sale thresholds and have a majority of their common elements completed before they can be considered eligible for Fannie Mae financing. There are third-party companies like condo approval professionals LLC, but most lenders do the review process in-house.

By understanding the eligibility requirements for Fannie Mae-approved condos, you can better navigate the mortgage process and increase your chances of securing financing for your desired condominium. Our team at Bennett Capital Partners is here to help you understand these requirements and guide you through the process, whether you're a first-time homebuyer or an experienced investor looking to purchase a condo using a jumbo mortgage or construction loan.

Understanding FNMA Condo Requirements and the Role of a Condo Project Manager

it is essential to understand the role of an FNMA condo project manager who oversees compliance with FNMA condo requirements. These requirements encompass various aspects, including the need for FNMA condo insurance that meets specific criteria. To ensure compliance, an FNMA condo questionnaire is often utilized to gather necessary information about the condominium project. Additionally, if you are considering purchasing a condominium as a second home, it is important to familiarize yourself with the FNMA second home guidelines. Because of the complexities, it is highly recommended you work with an experienced mortgage broker.

Ineligible Condo Features

Ineligible Condo Features

When considering a condominium purchase, it's essential to be aware of certain features that may render a condo ineligible for financing under Fannie Mae guidelines. These ineligible features can impact your ability to secure a mortgage. Bennett Capital Partners offers various loan types that allow for Fannie Mae's ineligible features. Some of the programs are; hard money mortgages, conventional mortgages, non-QM mortgages, and foreign national mortgages.

In this section, we will discuss some common ineligible for condo ownership features that may impact your financing options.

High Single-Entity Ownership

Fannie Mae guidelines stipulate that no single entity (such as an individual, investor group management company, or corporation) can own more than 10% of the total units in a condominium project for projects with 21 or more units. For projects with 2 to 4 units, no single entity can own more than one unit. This rule is in place to prevent a single condo unit owner from having too much control over the project and to promote a diverse community of homeowners.

As discussed earlier, Fannie Mae requires condo projects to maintain adequate reserve accounts for future repairs deferred maintenance and replacements. If a condo project's budget does not allocate sufficient funds towards reserves and deferred maintenance, it may not be eligible for financing under Fannie Mae guidelines.

Excessive Commercial Space

Condo projects with a significant percentage of commercial space may be ineligible for Fannie Mae financing. The rationale behind this rule is to minimize the risk of financial instability resulting from fluctuations in commercial real estate markets. Ie; Condotel's are often confused with condos initially by borrowers. It's important to know that a Fannie Mae Condotel approval does not exist. A condotel is considered a commercial property and ineligible for delivery to Fannie Mae.

Incomplete Legal Phasing

Condominium projects that are still in the development or construction phase must have completed legal phasing before being eligible for Fannie Mae financing. This requirement ensures that the project is legally established, and unit owners have clear title to their properties.

Ongoing Litigation

If a condominium project is involved in ongoing litigation related to its construction, financial matters, or other issues, it may be considered ineligible for financing under Fannie Mae guidelines. Litigation can pose financial risks for both the homeowners association (HOA) and potential lenders.

Some condos may be classified as non-warrantable, meaning they do not meet Fannie Mae or Freddie Mac guidelines for financing. These condos may have unique features, such as being part of a resort-style development or a condo-hotel (condo-tel). Financing options for non-warrantable condos may be limited, but specialized mortgage products like non-warrantable condo mortgages can help in these situations.

By being aware of these ineligible condo features, you can better navigate the financing process and explore Non Warrantable condo loan options offered by Bennett Capital Partners, such as hard money mortgages, VA mortgages, or USDA mortgages, depending on your specific needs and circumstances.

Frequently Asked Questions (FAQs)

1. Can I get a mortgage for a non-warrantable condo through Bennett Capital Partners?

Yes, Bennett Capital Partners offers non-warrantable condo mortgages for borrowers seeking a non-warrantable condo. These specialized mortgage products are tailored to meet the unique needs of borrowers seeking financing for condos that do not meet Fannie Mae or Freddie Mac guidelines.

2. How do I know if a condo qualifies for Fannie Mae financing?

To determine if a condo project is eligible for Fannie Mae condo loans, it must meet several eligibility requirements, such as financial stability, adequate reserve accounts, and acceptable legal documentation. You can work with your lender or broker to verify the eligibility of a specific condo project.

3. Are FHA, VA, and USDA mortgages available for condominium purchases?

Yes, FHA mortgages, VA mortgages, and USDA mortgages are available for eligible condominium purchases. Each of these loan programs has its own set of eligibility requirements and guidelines that must be met for a condo project to qualify.

4. What is the difference between a full review and a limited review for condo approvals?

A full review is a more comprehensive evaluation of a condo project, which includes a detailed assessment of the project's and management company's financial stability, reserve accounts, legal documentation, and other factors reviewed. A limited review is a less rigorous evaluation that typically focuses on the borrower's creditworthiness and the individual condo unit. The type of review required depends on factors such as the down payment, occupancy type, and the project's eligibility status.

5. How can I find out more about financing options for condominium purchases through Bennett Capital Partners?

You can visit the Bennett Capital Partners website to learn more about their financing options, including condo mortgage loans and other loan products. You can also apply online or request a quick quote to get started with the mortgage process.

6. What is an FHA Single Unit Approval, and why is it necessary?

An FHA Single Unit Approval (SUA) is a crucial requirement when seeking an FHA mortgage for condominium units. The Federal Housing Administration (FHA) must confirm that the condo fulfills its standards for safety, security, and soundness before they can insure a loan. SUA allows FHA buyers to purchase condos with an FHA mortgage even without the condo having formal FHA approval.


Bennett Capital Partners is dedicated to helping you navigate the complex world of Fannie Mae condo guidelines. As experts in condo lending guidelines, we understand the importance of ensuring that your condo project meets all necessary requirements for approval. With the help of our extensive experience closing condos in the Florida market.

If you're looking for a reliable partner to guide you through the Fannie Mae condo approval process for your condo building, look no further than Bennett Capital Partners. Contact us today to learn more about our services and to discuss your specific project needs.

📞 Give Us A Call Today 1-800-457-9057


Philip Bennett

Philip Bennett

Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.

Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.

Discover helpful tips and tricks on mortgages by reading our blog posts

Breaking Down the New 95% LTV in Fannie Mae 2-4 Unit Guidelines - to learn more about the Fannie Mae 2-4 Unit Guidelines with only 5 Percent down. Click here to read the full article

Discover The Easy Way To Find VA Approved Condos - to learn more about how VA Approved Condos and how to finance them. Click here to read the full article

Everything You Need To Know About FHA Approved Condos To learn how to find and Finance FHA Approved Condos. Click here to read the full article

The Rise of Condo Living: Fannie Mae Condo Mortgages in Miami's Skyline To learn more about Fannie Mae Condo Mortgages. Click here to read the full article

How to Get Foreclosure Bailout Mortgages: A Step-by-Step Guide. To learn more about getting a foreclosure bailout mortgage. Click here to read the full article

How to Qualify for an FHA Loan in Miami: The Complete Guide. to learn all about FHA loans and how to close with success. Click here to read the full article.

Can I Get a Bank Statement Cash Out Refinance Loan? to learn more about how this program can help you get the cash out of your property using bank statement deposits as income. Click here to read the full article

Fannie Mae Homepath Program: Everything You Need to Know to learn more about how this program can help you finance a fannie mae foreclosure property. Click here to read the full article

Fannie Mae HomePath Program: Your Key to Finding Your Dream Home to learn how you can buy a Fannie Mae foreclosure property. Click here to read the full article

Home Possible® Mortgage Income Limits & Guidelines to learn more about how this program can help you purchase your dream home with only 3% down. Click here to read the full article

A Deep Dive into Fannie Mae's Condo Project Review Process to learn more about the fannie mae project review process. Click here to read the full article

Key Condo Financing Terms

Fannie Mae Condo Investor Concentration

Understanding the Fannie Mae Condo Investor Concentration is crucial for both realtors and investors. This metric can significantly impact the eligibility of a condo for financing. For more information, check out our comprehensive guide on the subject.

Home Possible Income Limits Lookup

Are you curious about the income limits for Freddie Mac's Home Possible program? Use our Home Possible Income Limits Lookup tool to find out if you qualify for this advantageous mortgage option.

Limited Review Condo Questionnaire PDF

Before investing in a condo, it's essential to go through a Limited Review Condo Questionnaire PDF. This document will provide you with insights into the condo association's financial health and rules.

New Condo Mortgage Rules

Stay updated with the New Condo Mortgage Rules that have recently been implemented. These rules can affect your mortgage rates and eligibility, so it's important to be informed.

Site Condo Fannie Mae

A Site Condo Fannie Mae is a specific type of condominium that meets Fannie Mae's financing eligibility. Learn more about what makes a condo a "site condo" and how it differs from other types.

Fannie CPM

The Fannie CPM (Condo Project Manager) is an online tool that helps lenders review condo project eligibility. It's a must-use resource for anyone in the mortgage industry. The Fannie Mae Approved Condo List is not available to the public.

Fannie Mae Condo Questionnaire Answer Key

Confused about the Fannie Mae Condo Questionnaire? We've got a Fannie Mae Condo Questionnaire Answer Key to help you understand each question and what it implies for your investment.

Fannie Mae Site Condo

A Fannie Mae Site Condo is a detached condo unit that is eligible for Fannie Mae financing. It's important to understand the criteria that make a condo a "site condo" to ensure your investment is sound.

Non-Warranted Condo

Investing in a Non-Warranted Condo? Know the risks and rewards, as these types of condos don't meet the typical financing guidelines set by Fannie Mae or Freddie Mac.

Significant Deferred Maintenance

Significant Deferred Maintenance can be a red flag when considering an investment property. It refers to necessary repairs or maintenance that have been delayed, which could impact the property's value.

Manufactured Home Condo Projects

Manufactured Home Condo Projects are becoming increasingly popular. These projects offer a unique set of benefits and challenges, so it's crucial to understand them fully before investing.

Projects Approved

Looking for Projects Approved by Fannie Mae or Freddie Mac? We have a list that can help you find condo projects that meet specific financing guidelines.

Home Condo Projects

Home Condo Projects are residential developments that offer both standalone homes and condominiums. Learn more about these hybrid projects and their financing options.

Approved Status

Understanding the Approved Status of a condo project can help you make an informed decision. This status indicates that the project meets specific guidelines and is eligible for financing.

I hope these sections add value to your blog post while naturally incorporating the keywords you've provided. Feel free to adjust the text as needed to better fit the context of your article.



Betygsatt till 0 av 5 stjärnor.
Inga omdömen ännu

Lägg till ett betyg

Finance & Mortgage Blog

Mortgage Market Insights: The Latest Updates and Expert Analysis

Latest Posts

bottom of page