B4-2.2-02, Full Review Process (07/05/2023)

The Full Review process is a method for the review of new and established condo projects, co-op projects, and certain manufactured home projects. Lenders performing a Full Review must ensure that the project meets all applicable eligibility requirements.

A Full Review may be performed when the unit securing the loan is an attached unit located in one of the following project types:

• an established condo project, or

• a new or newly converted condo project.

A Full Review may also be performed when the property securing the loan is a manufactured home in an established condo project that is not subject to a community land trust, deed restriction leasehold estate, or shared equity arrangement.

These projects may also be reviewed by Fannie Mae through the PERS process (see B4-2.2-06, Project Eligibility Review Service (PERS)B4-2.2-06, Project Eligibility Review Service (PERS)).

Full Review requirements for units in co-op projects are addressed in  B4-2.3-02, Co-op Project EligibilityB4-2.3-02, Co-op Project Eligibility.

Lenders must use CPM to assist in their Full Review of a condo project (except for projects containing manufactured homes). CPM is a Web-based tool designed to facilitate the lender's review of the project to determine if it meets Fannie Mae's project eligibility requirements. The lender must document the loan file with the CPM decision by including the unexpired CPM Certification in the file.

CPM certifications are based solely on the data that the lender enters into CPM. The lender is responsible for reviewing the applicable project documentation to obtain the information needed to complete the project review and enter the data into CPM. The lender is also responsible for ensuring that all data entered into CPM is correct and that the project meets all applicable Fannie Mae eligibility requirements.

CPM is available on Fannie Mae's website.

The table below describes the status designations that are available in CPM for each project.

Project transaction eligibility or other loan-level restrictions will display in CPM. When CPM displays a delivery restriction for a specific project, lenders may only sell loans that comply with the stated restrictions.

For example, loans in some projects may be limited to certain occupancy types (such as principal residences only, or principal residences and second homes) or there may be limits on the LTV ratios.  

If a lender becomes aware of any information that could impact the eligibility status reflected in CPM (such as, significant deferred maintenance or major litigation), the lender must notify the CPM Management team (see  E-1-02, List of ContactsE-1-02, List of Contacts) with the relevant data and information. Fannie Mae will evaluate the new information and its impact on eligibility. Before selling a loan secured by a unit in such a project, the lender must confirm that the project retains its approved status. Notification must occur as soon as practicable but no later than five business days after becoming aware of such information.

Fannie Mae reserves the right to change a project eligibility status designation if information acquired after approval or certification has an impact on a previously issued eligibility determination.

Note: Lenders are responsible for verifying and documenting that the project meets the applicable insurance requirements described in Chapters B7-3 and B7-4. Fannie Mae does not review insurance policies as part of the review process.

When determining the eligibility of a condo project on the basis of a Full Review, lenders must ensure the condo project meets the eligibility requirements described in the following table.

When determining the eligibility of condo project consisting of manufactured homes on the basis of a Full Review, lenders must ensure the property and project meet the eligibility requirements described in the following table.

Reserve studies may be used to determine the appropriate level of reserves the HOA must maintain to ensure the project’s long-term success. Reserve studies will also provide useful information regarding the adequacy of the HOA’s current reserve funds and offer recommendations to meet funding goals in the event the HOA has under-reserved for its needs in the past. The lender may review the most current reserve study or a reserve study update provided it has been completed within three years of the date on which the lender approves the project.

Reserve studies must be prepared by an independent third party that has specific expertise in completing reserve studies. This expertise may include any of the following:

• a reserve study professional with reserve study credentials,

• a construction engineer,

• a certified public accountant who specializes in reserve studies, or

• any professional with demonstrated knowledge of and experience in completing reserve studies.

While Fannie Mae does not require that a standard format be used for the reserve study, the following items must be addressed:

• all major components and elements of the project’s common areas for which repair, maintenance, or replacement is expected;

• the condition and remaining useful life of each major component;

• an estimate of the cost of repair, replacement, restoration, or maintenance of major components;

• an estimate of the total annual contributions required to defray costs (minus the existing reserves funded for this purpose), including inflation;

• an analysis of existing funded reserves; and

• a suggested reserve funding plan.

Note: Individual states may have various statutes concerning the use and content of reserve studies. Fannie Mae requires that a reserve study used by the lender in its analysis meet or exceed requirements set forth in relevant state statutes.