Fannie Mae accepts delivery of FHA mortgage loans in FHA-approved condo projects that appear on the FHA-approved condo list. For conventional mortgage loans, Fannie Mae will accept delivery of mortgages in established projects on the FHA-approved list provided the approval was completed by FHA HUD Review and Approval Process (HRAP) rather than through an FHA Direct Endorsement Lender Review and Approval Process (DELRAP). FHA condo project approval is not acceptable for conventional mortgage loans secured by units in new or newly converted condo projects.
Lenders must maintain copies of the FHA approval documentation in the loan file.
For FHA mortgage loans, lenders must ensure that
the FHA standard conditions have been met for presale, occupancy status, and completion;
any additional conditions noted by FHA have been met;
the project is not an ineligible project as defined in B4-2.1-03, Ineligible Projects;
the project is covered by the required insurance as set forth in Subpart B7-4, Liability and Fidelity/Crime Insurance Requirements for Project Developments; and
the project is not comprised of manufactured homes.
For conventional mortgage loans, lenders must ensure that
the project meets Fannie Mae’s criteria to be considered an established project;
the project is not comprised of manufactured homes;
the project meets the Requirements Applicable to All Properties in a Condo, Co-op, or PUD Project described in B4-2.1-01, General Information on Project Standards;
the project is not an ineligible project as described in B4-2.1-03, Ineligible Projects; and
any additional conditions noted by FHA have been met.
When lenders deliver mortgage loans secured by condo units in an FHA-approved project, lenders must retain the documentation as set forth in Document Retention in B4-2.1-01, General Information on Project Standards.
The table below provides references to the Announcements that have been issued that are related to this topic.