Community Associations Institute Urges Reforms To Modernize Federal Condominium Lending Rules
Falls Church, Va., Aug. 14, 2025 (GLOBE NEWSWIRE) -- Community Associations Institute, the leading international authority supporting condominium associations, homeowners associations, and housing cooperatives, continues to urge the Federal Housing Finance Agency to modernize the condominium lending eligibility requirements managed by government sponsored entities, including Fannie Mae and Freddie Mac. These outdated guidelines restrict mortgage financing for thousands of responsible condominium associations and millions of homeowners nationwide.
Fannie Mae and Freddie Mac, overseen by FHFA, are primary sources of financing for homebuyers nationwide. However, strict eligibility rules have placed thousands of condominium associations on the ineligible list, blocking millions of homeowners from selling their homes. These restrictions reduce the pool of qualified buyers, decrease property values, and strain association finances by limiting funds for maintenance and reserves, threatening the overall stability and affordability of the condominium market.
At the same time, the market faces rising costs from safety reforms enacted after the Surfside tragedy, including higher insurance premiums and reserve requirements. While these measures are essential for long-term safety, current lending guidelines have not adapted to these changes. The disconnect causes unintended penalties for responsible associations struggling to balance safety and affordability.
“More than 5,400 condominium associations are currently listed as ineligible for financing by Fannie Mae and Freddie Mac, directly impacting over 1 million homeowners who face difficulty selling their homes,” says Dawn M. Bauman, CAE, chief executive officer at Community Associations Institute. “This situation threatens homeownership affordability, property values, and community stability.”
CAI’s Government and Public Affairs team recently met with FHFA leadership to share urgent concerns and policy recommendations aimed at updating requirements. Current constraints disproportionately affect well-managed condominium associations that are working to meet evolving standards for reserves, building maintenance, and insurance.
Specifically, CAI is calling on FHFA to direct Fannie Mae and Freddie Mac to:
- Modernize and clarify insurance and reserve requirements to align with today’s market realities.
- Eliminate impractical rules such as insurance requirements that are either unavailable or cost prohibitive.
- Provide secure, direct access to eligibility status and remediation guidance for condominium boards and their authorized managers.
- Implement a realistic, data-driven timeline for reserve study completion and funding compliance for associations of all sizes.
“These necessary changes will help preserve homeownership opportunities and stabilize condominium communities across the U.S.,” says Bauman. “Without timely action, homeownership will become less accessible, property values will decline, and communities nationwide will face financial instability. CAI stands ready to partner with FHFA, Fannie, Freddie, and other stakeholders to create effective policies that safeguard both safety and market access.”
For more information and resources, including CAI’s guide on condominium lending eligibility, visit CAI’s website at www.caionline.org/fannie-mae-freddie-mac.
Blaine Tobin Community Associations Institute 703-970-9235 btobin@caionline.org
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