GSEs (Fannie/Freddie),FHA&HUD

Condo Rules

Posted on Wednesday, December 1, 2010

GSE and FHA Condo Rules
(As of 11/2/2010)

Issue Fannie Mae Freddie Mac FHA
Owner-Occupancy Requirements for Established Projects.

FNMA No limit if the buyer will occupy the unit (as principal or secondary residence).
If the buyer is an investor, the owner-occupancy requirement is 51%. REO units are counted as owner-occupied units. REO units are those owned by a financial institution and are for sale (not rental).

FREDDIE Same as Fannie Mae. If the buyer is an investor, the owner-occupancy requirement is 51%. [Note: Not known how Freddie treats REO units.]

Currently 50% minimum owner-occupancy requirement.
Vacant and REO properties are excluded from the calculation through 12/31/2010.

ISSUE
Owner-Occupancy Requirements for New Condo Projects

FNMA The owner-occupancy requirement varies from 50% to 70%, conveyed or under contract, depending on the type of project approval review process used. Fannie will consider waivers for projects enjoying healthy sales. In response to NAR concerns, Fannie has informed NAR it plans to add an FAQ re availability of waivers.

FREDDIE At least 70% of units must be occupied or under contract to purchasers. The units must be occupied as primary residences or second homes.
Currently 50% minimum owner-occupancy requirement.

Vacant and REO properties are excluded from the calculation


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