Frequently Asked Questions

Many Lenders do business with the GSEs however, in order to do so, each must meet their respective approval criteria.

While Fannie Mae has a formal project approval process (PERS), Freddie Mac does not.  Only certain project types require Fannie Mae’s approval.  The majority of condo and coop originations occur as a result of the Lender-delegated Review process; where the approved Seller/Servicer applies the Selling Guide criteria and makes the eligibility decision.

PREP provides third-party review services that aid the lender in the origination of condo and coop end loans against GSE eligibility criteria.

PREP provides project risk analysis services for lenders which includes small savings and loans, mortgage banks and credit unions as well as local, regional, national, and international lending institutions that originate residential loans in the United States.

PREP’s services are nationwide including Hawaii and Alaska.

No, lenders are free to lend where they find the risk to be acceptable. However, if the loan does not meet the eligibility criteria described in the Single-Family Selling Guide, they will likely not be able to deliver that loan to a GSE investor.

As of July 1, 2023, CPM must be used for all New and Established attached Condominiums of five, or more units.

No.  Lenders make the decisions regarding what loans they will originate based upon their own risk tolerances and oversight. That said, loans originated in developments with the “Unavailable” status may not be delivered to Fannie Mae.

No. Nor has there ever been a public-facing list of such developments. Condo Project Manager (CPM) is a “tool” that Fannie Mae has made available to approved Seller/Servicers and their Correspondents to assist in the eligibility evaluation of certain Condominiums.

Seek out the assistance of Project Risk Evaluation Partners, LLC (PREP).  We will assist you with that understanding.

No, it is not. The representations and warranties described in the Selling Guide must be made in their entirety. CPM usage does not take the place of that eligibility evaluation. CPM is best viewed as a means of memorializing your review efforts.

The short answer is, you don’t “have” to obtain a Questionnaire; neither GSE mandates their usage. That said, if you are to complete a proper eligibility determination, you will need data and oftentimes that data is best sought from the Managing Agent or a Board Member because it is very specific and not necessarily available readily from any other public source. The Questionnaire has arisen over time as a means to an end, allowing for the requirements of the Selling Guides to be reduced to a Question/Answer format.

Yes, they do.  However, it must be understood that exceptions are not granted for just anything and never without a strong, well-documented case having been made by the lender.

As early as possible. Many reviews require a significant amount of documentation which may take some doing to obtain. Don’t wait if you don’t have. Expectations will be unavoidably mismanaged if you wait until closing is scheduled to find out that something critical is missing.

First off, current today, perhaps delinquent tomorrow and the Board finds itself with a good-sized hole in its finances and a pending legal battle to either compel payment or divest the entity of its ownership. Also, all owners, be they unit owners in a Condominium or shareholders in a Cooperative, have a legal right to vote their ownership interest as provided for in the operating documents of the development. When a single entity has a commanding percentage of ownership, the Board may find that said entity may have an agenda quite different from that of the Board.