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FAQs: Project Standards Requirements - Project Reviews (Jan. 2023)

Project Standards Requirements - Project Reviews

This FAQ document provides responses to common questions related to Fannie Mae’s project review methods and policies for determining project eligibility for mortgages secured by units in condo, co-op, and planned unit development (PUD) projects.  Visit Learn About Project Standards to see all Project Standards and Project Insurance FAQs as well as additional helpful information.

Note: The numbering sequence is from the PDF document that contains all Project Standards Requirements FAQs and have been separated for easier reference by topic. Changes since the last update are marked either NEW or UPDATED. Minor (non-substantive) wording, number, and heading changes are not marked.

Click below to access Project Standards Requirements related FAQs:


Project Reviews - FAQs

  1. If a detached unit is located in a condo project with both attached and detached units, must the detached unit be subject to project review?

No. There are no project review requirements for detached units in condo projects (other than manufactured homes), even if the project also includes attached units. Instead, lenders must confirm all the following requirements are met:

  • The project and the unit are in compliance with all other Fannie Mae requirements for property eligibility and appraisal standards.
  • The project and the unit have the required insurance as described in Selling Guide Subpart B7, Insurance.
  • The detached unit is not a manufactured home. If the project contains manufactured homes, the project may require either a lender-delegated review or a Fannie Mae PERS review. Refer to the Selling Guide to determine which review may be required.
  • The project is in compliance with the requirements for priority of common expense assessments (see Selling Guide B4-2.1-01, General Information on Project Standards).

Project review requirements continue to apply to the attached units as per the Selling Guide.


  1. How can a lender determine the number of units a single entity owns in a project when completing a Limited Review?

The lender is responsible for obtaining the information on single-entity ownership concentration from a reliable source, including, but not limited to, the HOA, management company, or title company.


  1. Do different requirements apply to a Full Review versus a project review completed through CPM?

No. The policy requirements for projects being reviewed manually under the Full Review process or with the aid of CPM are the same. Although the electronic questionnaire in CPM may not request information concerning every Full Review requirement detailed in the Selling Guide, lenders must make sure those projects meet the applicable requirements in the Selling Guide B4-2.2-02, Full Review Process and B4-2.2-03, Full Review: Additional Eligibility Requirements for New and Newly Converted Condo Projects.


  1. When conducting a CPM Review, is the lender required to review the project’s legal documents and budget?

It depends on the type of project in which the unit is located. The lender must review the legal documents and budget for attached units in a new or newly converted condo project consisting of more than four units being reviewed through CPM. The lender must review the budget for attached units in an established condo project reviewed through CPM. Additional information on requirements for the project’s legal documents and budget can be found in the Selling Guide B4-2.2-02, Full Review Process and B4-2.2-03, Full Review: Additional Eligibility Requirements for New and Newly Converted Condo Projects.


  1. What is the lender’s responsibility for the review of legal documents? Must lenders obtain an attorney’s opinion or memorandum regarding the legal documents for new projects?

For attached units in new condo projects (containing more than four units), Fannie Mae requires lenders to validate that the condo project’s legal documents are in compliance with Selling Guide requirements. Except for new projects submitted for Fannie Mae review via PERS, obtaining a written determination of compliance from an attorney is optional.

For new and newly converted condo projects submitted for Fannie Mae review via PERS, a qualified attorney engaged by the lender must review the legal documents and determine that they are in compliance with Fannie Mae’s requirements. The determination must be documented in writing but does not need to be a formal legal opinion. The lender must complete Form 1054, Warranty of Condominium Project Legal Documents, and attach the attorney review as part of the PERS submission process.

Fannie Mae reserves the right to require a review of the legal documents for an established condo project submitted for Fannie Mae review via PERS.


  1. When reviewing a new condo project for compliance with the Rights of Condo Mortgagees and Guarantors as outlined in Selling Guide B4-2.2-03, what mortgagee notification rights must be included in the project documents? NEW

The project documents must give the mortgagee and guarantor of the mortgage on any unit in a condo project the right to timely written notice of:

  • any condemnation or casualty loss that affects either a material portion of the project or the unit securing its mortgage;
  • any 60-day delinquency in the payment of assessments or charges owed by the owner of any unit on which it holds the mortgage;
  • a lapse, cancellation, or material modification of any insurance policy maintained by the homeowners’ association; and
  • any proposed action that requires the consent of a specified percentage of mortgagees.

The Selling Guide states the mortgagee must receive timely written notice The mortgagee cannot be required to provide a prior written request for such notification. The language can however, indicate that the borrower is obligated to provide the HOA with the name of their mortgage holder, to support the HOA in maintaining accurate and up-to-date records for notification purposes. 


  1. Can lenders submit a PUD project through the PERS process?

Not generally. In most cases, the evaluation of PUD projects remains a lender-delegated function (i.e., project review is not required for most PUD projects). However, Fannie Mae requires lenders to submit PUD projects consisting of single-wide manufactured homes for review through the standard PERS process.


  1. What is the review process for manufactured housing?

Established projects consisting of manufactured housing may be reviewed by lender-delegated full review process. If the project is considered a new project; has resale restrictions or shared equity; or is a community land trust project or subject to a leasehold, it must be reviewed through the Fannie Mae PERS process. Multi-width manufactured homes that are part of a PUD project do not require a review.

  1. What are cohousing communities and are cohousing units eligible for Fannie Mae financing?

Co-housing communities are typically characterized by private unit ownership within a community that has explicit arrangements for shared community life and the responsibility for and ownership of common elements and amenities. While these types of communities are often marketed to consumers as co-housing communities, they are typically legally organized as a condominium, co-operative, or PUD project. Other legal structures may also exist for co-housing communities, which may not meet Fannie Mae eligibility requirements, such as common interest apartments. Mortgages secured by units in co-housing communities may be eligible for delivery to Fannie Mae provided the co-housing project and the subject property unit meet all Selling Guide provisions including any applicable policies related to project standards, deed restrictions, and insurance.


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