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Fannie Mae’s unpublicized condo blacklist is dreaded by buyers and sellers

Condo buyers and refinancers on Fannie Mae’s unpublicized condo blacklist pay extra for mortgages

Mortgage financing company Fannie Mae has revised its standards in the wake of the 2021 condo collapse in Surfside, Florida, causing them to create a unpublicized condo blacklist. This private list is only visible to mortgage providers and services, and it includes properties that are not in good financial or physical condition or have neglected upkeep.

Several people who were planning on purchasing a condo or refinancing their mortgage were taken aback by this news. Keep reading to find out how this list may influence you whether you're in the market for or already own property in Florida.

How this list affects Florida property buyers and owners

A rising number of condo complexes, condo associations, and co-ops are being blacklisted by Fannie Mae and Freddie Mac, the state-sponsored firms that guarantee a large portion of house and multifamily loans. Now at over 1,400 homes, this increasing list is making it difficult, if not impossible, for some purchasers and owners to secure mortgages without paying higher interest rates.

Due to the anonymity of these condo blacklist listings, condo associations and sellers have had pending sales threatened, and purchasers have been pushed to obtain more costly financing. A representative of Fannie Mae stated that 1% of the country's condominiums and co-ops are included on the list.

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Making the condo blacklist public would be more helpful

In defense of the condo blacklist, a Fannie Mae spokesman argued that the precautions were necessary to shield borrowers against condo and co-op developments that posed physical or financial risks. The Federal Housing Administration also maintains a list of properties that are not eligible for FHA loans, although this information is available to the public. Experts in the real estate industry believe that Fannie Mae should also offer a public list.

According to Ken Fears, director of conventional finance and valuation policy at NAR, making the information public would be helpful not just to mortgage companies and servicers but also to brokerage firms and HOAs. At present, there is no method for an HOA or agent to learn about or dispute inaccurate information about a property included in this registry. This is a major issue.

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