Here are proactive steps to boost condos’ value

ANOTHER VIEWPOINT

Florida’s condo market is adapting to new state requirements, including mandatory inspections for older condominium buildings and adequate reserves for structural repairs. These changes are influencing how condos are being financed, bought and sold. In this evolving landscape, preserving and enhancing property value requires more diligence and expert guidance.

Condo unit owners and their Realtors should be proactive to correct any perceived issues, such as deferred maintenance, inadequate reserves and insurance gaps.

Fannie Mae and Freddie Mac now offer online tools that allow condominium homeowner association (HOA) board members and their property managers to check a project’s loan eligibility status. These platforms reveal reasons for ineligibility, such as deferred maintenance, insufficient reserves or insurance-related issues.

Previously, this information was only accessible to lenders through confidential reports. These tools were introduced as part of the ongoing efforts to increase transparency following the 2021 Surfside condo collapse and the subsequent tightening of lending standards.

Unit owners can request that their HOA board members and managers access Fannie Mae’s “Condo Status Finder” by registering on the platform and searching using identifying information such as the association’s name, address or tax ID number.

Fannie Mae’s Condo Status Finder: condostatus.fanniemae.com

Fannie Mae’s Condo Status Finder User Manual: singlefamily.fanniemae.com/media/42281

The same request can be made through Freddie Mac’s platform, which also allows authorized representatives to appeal a condo project’s “not eligible” status.

Freddie Mac’s Not Eligible Status Data Form: sf.freddiemac.com/general/not-eligible-status-data-form

This transparency empowers associations to proactively address issues impacting eligibility and work toward resolving them. Even if there are no current plans to sell, unit owners should encourage their board members and managers to register and review their building’s status. Doing so now allows time to correct any issues before they affect future transactions.

To attract the broadest pool of qualified buyers — and avoid delays or deal cancellations — it’s essential for listing agents to gather financing-related documents in advance. Helping buyers determine which loan products the building may qualify for gives your listing a competitive edge and saves valuable time.

Agents should start by asking whether a loan is assumable, meaning a buyer can take over the existing loan from the seller.

Typically, the Federal Housing Administration (FHA) insured and Veteran Administration (VA) loans are assumable, but conventional (Fannie Mae/Freddie Mac) loans are not. VA loans can be assumed by non-veterans if they meet the lender’s credit and income requirements.

Listing agents should also check whether the condo building is listed as an FHA- or VA-approved project in their public databases. If so, be sure to advertise that the building is already approved as of the listed date.

FHA-Approved Condo List: entp.hud.gov/idapp/html/condlook.cfm (Condos not on the FHA list may still be eligible through single-unity (spot) approval.)

VA-Approved Condo Report: lgy.va.gov/lgyhub (Select Florida for a List)

Sellers should also request board minutes, insurance policies and any pending litigation involving the condo association to help buyers evaluate financing options early and accurately. Minutes may reveal upcoming assessments, maintenance, lines of credit or loans. And it’s important to check insurance policies to look for deductibles over 5%, which can affect loan eligibility.

Per Fannie Mae guidelines, insurance deductibles exceeding 5% of the coverage amount may disqualify a buyer from conventional financing. Having this information up front helps ensure a smoother, faster transaction.

In this time of regulatory change, the value of an experienced Realtor is more critical than ever. By staying informed and proactive, listing agents and condo owners can take meaningful steps to protect and enhance the value of their condo units.

Danielle Blake is the chief of residential and advocacy for Miami Realtors.