Why is it important for you to know whether the condo you want to buy is Fannie Mae approved? Here’s why . . .

So you’ve chosen to buy a beautiful Miami condo. And you need to get condo financing for this purchase, and you’re wondering how much your down payment will need to be. There are many factors that determine this, but you will almost always get the best rates and terms if the condo is Fannie Mae approved. And that’s why you want to know if your Miami condo has Fannie approval or not! :)

Below you will find the most updated Fannie Mae approved condos list for the most popular Miami neighborhoods. But before we jump into the list of Fannie Mae-approved condos, let’s take a look at the benefits of having a Fannie Mae-approved mortgage.

Last updated: October 13, 2021

Table of Contents

1. Benefits of Fannie Mae Approved Condos
2. List of Fannie Mae Approved Condos in Miami
3. How to Search for Fannie Mae Approved Condos 
4. How Condos Get Fannie Mae Approval
5. What Role does a Condo Board have in Fannie Mae Approval?
6. Low Down Payment Options for Fannie Mae Approval 
7. How to Get Financing with Low Down Payment if Not Fannie Mae Approved
   
   

— Benefits of Fannie Mae Approved Condos

If a condo fits Fannie Mae guidelines you could get:

1. A down payment as low as 3% of purchase price for a loan up to $548,250 (2021) and up to $625,000 (2022). In some higher-cost markets, loans limit can currently be up to a ceiling that’s equal to 150 percent of the baseline conforming loan limit, or $822,375.
2. The most favorable interest rates that the lender can offer
3. Lower origination fees

— List of Fannie Mae Approved Condos in Miami

Do you want to know if a specific Miami condo is Fannie Mae approved? You are in luck, as we have compiled a comprehensive list here for you.

You will notice in the list below that many of the Fannie Mae approved condos are new construction. This is because developers take the time and money to go through the Fannie Mae project approval process. That said, we also have added condos in this list where we know that relatively recently a lender has been able to get the condo approved for lending with favorable Fannie Mae loan terms. 

These lists are constantly changing. Just because a condo you like is not in this list, or just because it IS in this list, doesn’t guarantee that it is or isn’t Fannie Mae approved. It does mean that this condo building recently was approved either directly with Fannie or with a lender we have a relationship with, and that means it is very likely to be approved again for a Fannie-backed mortgage from your lender.

By the way just because you don’t see your favorite condo in the above list doesn’t mean it isn’t Fannie Mae approved...and just because it is in this list doesn’t guarantee it either. Things change, and ultimately you will have to go through a process with your lender to determine what they approve at that moment in time.

We have a much more elaborate list of Fannie approved condos in other places in South Florida in various price points. Contact us with your price point and desired neighborhood, and we will get you a list of likely to be approved condos.

— How to Search for Fannie Mae Approved Condos

Fannie Mae maintains a list of approved condos. These are ONLY the PERS approved condos, so it is only a very short list of approvals and doesn’t mean that your favorite condo can’t be approved for a Fannie Mae backed mortgage by a lender.

Many Miami condos will pass lender-initiated, one-off approvals to be able to qualify for a Fannie Mae or Freddie Mac-approved loan. The condo rules and financials of the condo building need to pass muster. The best way to know is to search for any Miami condo that you like, and submit a request to us to see if we can verify the likelihood of it being able to be Fannie Mae approved.

— How Does a Condo Receive Fannie Mae Approval

There are two ways you can get Fannie Mae approval for your condo purchase.

1. Pre-approved condo through Project Eligibility Review Service (PERS). If the building chooses to pay the fee and go through a standardized review process with Fannie Mae, it can essentially be “pre-approved” for Fannie Mae financing. So if the condo you are interested in buying is already approved, you are good to go.
2. One-off Fannie Mae approval through your lender. If your condo is not already on the Fannie approved list, your lender can send a condo questionnaire to your association to complete, which will ask the questions they need to determine if it will pass muster with Fannie Mae.

— What Role Does a Condo Association Have in Fannie Mae Approval?

A condo association can opt to go through the PERS approval, which does have a cost associated with it. By going through the PERS approval, they really streamline the ability for buyers to get Fannie Mae-approved condo loans and also attract more buyers in general. Another way a condo association can impact Fannie Mae approval is if they follow all guidelines that would be checked if a lender would attempt to get a one-off Fannie approval for a condo loan. The one item that can affect a condo sale is whether or not a condo building has 10% of the total budget set aside for reserves. 

Reserves are like a savings account for future major repairs (for example, replacing the roof every 10 years), and Fannie wants to see that the HOA or condo association is being fiscally responsible in regard to taking care of major items like that. Many condo associations vote down reserves to lower than 10% of budget in order to lower association fees, but it backfires by making the condo ineligible for easy Fannie Mae financing and thus lowering the property values.

— Low Down Payment Options for Fannie Mae Approved Condos

Typically you can get as low as 3.5% down payment if a condo is Fannie Mae approved. However, in order to avoid an additional monthly mortgage insurance premium and also receive the absolute best rates, you would want to put at least 20% down.

— How to Get Financing with Low Down Payments if the Condo is Not Fannie Mae Approved

There are many lenders that will be able to get you 10% down payment total by doing what is called a 75/15 loan. That means that they give a first loan at 75% of the value of the property (in other words, a 25% down loan), and then do a simultaneous home equity line of credit for another 15%, which goes towards the 25% down loan. It sounds confusing, but here is a simple way to look at it:

Purchase Price, minus 75% first loan, minus 15% second line of credit = 10% down out of your pocket. So that is a common way to buy into a condo that is not Fannie Mae approved.

Another way to get a condo loan without Fannie Mae approval is to simply put 20-25% down to go through a streamlined condo approval process with your lender. As long as there is no litigation on the property, you will typically be able to get approval on the condo with the 25% down option. Sometimes it can go as low as 20%.

In the meantime, you can start searching for the perfect Fannie Mae approved condo here on our site. Happy searching!

 

Please let us know if you have any questions or need additional financing help.