Freddie Mac seeks to simplify Loan Originations

December 8, 2023

Freddie Mac unveiled a series of updates to its Condo Project Advisor tool on Wednesday, 12/6/2023, to simplify condo loan originations and enhance lender security through a new designation.

The new designation, referred to as "project certified" status for Project Assessment Requests (PAR), validates that condominium properties meet specific project review and general eligibility criteria for financing, Freddie Mac said. Once a property achieves this status, lenders will only need to conduct minimal project underwriting, potentially saving time for lenders and money for borrowers.

Moreover, lenders can now apply for project-certified status at no cost for particular projects, primarily those "for loans secured by units in condo projects that don't already carry this status," the GSE elaborated.

"Condominiums provide a key path to homeownership, particularly for first-time and low-income homebuyers. Considering the current housing market challenges, it should come as no surprise that condo financing is especially critical," said Tanya DeLia, single-family vice president of collateral risk management at Freddie Mac. "We are committed to continuing to find ways to help streamline condo loan originations while helping lenders ensure that condo homebuyers are put on a path of sustainable and successful homeownership in condo communities."

The project-certified designation will become available to all Freddie Mac-authorized lenders utilizing Condo Project Advisor starting December 8, 2023.

The Community Home Lenders of America (CHLA) welcomed the development, recognizing the importance of transparency for condo associations and lenders regarding condo projects eligible for Freddie Mac loans. CHLA commended Freddie Mac for its efforts and noted that these actions could facilitate access to affordable mortgage loans for condos, which represent one of the most affordable segments of the housing market.

The Community Associations Institute (CAI) also applauded the move. "CAI is hopeful this move will improve access to lending in the U.S. At a time when there is a heightened awareness and increased emphasis on building maintenance and challenges related to property insurance requirements restricting access to lending proves to lower property values, leaving less money and incentive for homeowners to invest in maintenance, especially in urban opportunity zones throughout the U.S.," the group said on its website. "Hopefully, this move will create greater access to lending for condominium buyers and sellers."

Source: Christine Stuart, National Mortgage Professional

Mortgage Rates: Daily Index

If you're reading this on Thursday, December 7, it is the day before the big jobs report-- the one with all the potential in the world to cause huge reactions for interest rates. It's not that lenders are watching the economic data and then guessing at how to adjust their rates in response. Lenders are watching the bond market to determine the true value of the loans they originate, and the bond market is watching the economic data!