Fannie Mae and Freddie Mac Rules Every Condo Board Must Know | The Uncommon Area Ep. 102

A buyer can check every box, perfect credit included, and still lose financing because of the association they are buying into. Attorney Clint Brown joins Matthew Holbrook to explain why. Earlier this year, Fannie Mae and Freddie Mac issued a lender letter that eliminated the limited review process for condominium loans. Every application now goes through a full review, and the criteria associations must meet to pass that review changed along with it. Clint breaks down the three areas affected: insurance, reserve studies, and reserve funding, and explains what happens when a loan is denied and why accurate reporting matters more than ever. Key lessons: Insurance must now cover 100% of replacement cost, not actual cash value, with an exception for roofs Reserve studies must be updated at least every 36 months, and reserves must be funded at the full amount the study recommends The share of assessment income required to go to reserves increased from 10% to 15%, with an exception for associations already fully funding at the recommended level 1:29 Why HOA Boards Should Care About Fannie Mae and Freddie Mac 3:19 The Cost of a Denied Condo Loan 4:16 The March Lender Letter Ends the Limited Review 7:52 Three Compliance Criteria Fannie Mae and Freddie Mac Changed 8:46 Condo Insurance Requirements: Replacement Cost vs Actual Cash Value 12:03 Reserve Study Requirements and What Fully Funded Means 15:59 Reserve Contribution Rules: 10% to 15% 18:19 Does the HOA Blacklist Still Exist? 21:16 What to Do When a Condo Loan Is Denied 22:25 Accurate Reporting and Fraud Risk for HOA Boards 24:24 Closing Thoughts