Last month, Fannie Mae and Freddie Mac replaced limited condo reviews with closer checks for all but the smallest buildings. Starting in January, associations must put at least 15% of assessment income into reserves, up from 10%, adding hurdles for condo financing.
The changes are part of efforts to improve condo safety after the deadly 2021 collapse of an aging building in Surfside, Florida. Buildings that fail the requirements can still be listed for sale, but buyers may need cash or specialized, higher-rate financing, narrowing the pool of potential buyers.
Fannie Mae and Freddie Mac support about 70% of the mortgage market. National condo prices are 2% below peaks from a few years ago, according to Zillow; August sales fell 2.7% year over year, according to the National Association of Realtors. Condo inventory was 6.6 months of supply, compared with 4.7 months for single-family homes. Agents and lenders say buyers and sellers should check association finances and gather paperwork early.
