Lending Agency Guidelines on Reserve Studies

NpB (Arizona)
Posts: 605

Posted:

I just learned that Freddie Mac now has a standard that established condominium units conduct a reserve study every 3 years. Is there any requirement from lending agencies regarding reserve studies for planned communities (i.e. condos)?

MaxB4
Posts: 3,513

Posted:

I would n't think they would at this time. Condos, especially high rises, have to be a high priority right now.

MichaelT21 (Arkansas)
Posts: 462

Posted:

I've checked with our property management company and they say no one ever asks.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By MichaelT21 on 11/21/2022 9:38 PM
I've checked with our property management company and they say no one ever asks.

Are you a condo?

NpB (Arizona)
Posts: 605

Posted:

By planned community, I am referring to single family homes, not condos.

MichaelT21 (Arkansas)
Posts: 462

Posted:

Quote:

Posted By MaxB4 on 11/21/2022 9:40 PM

Posted By MichaelT21 on 11/21/2022 9:38 PM
I've checked with our property management company and they say no one ever asks.

Are you a condo?

We are not a condo, but our property manager primarily services condo properties. Her answer was general enough that I believe that no one ever asks for the condo communities that she serves, either.

MaxB4
Posts: 3,513

Posted:

It is a question asked on EVERY lender ceet.

MaxB4
Posts: 3,513

Posted:

Cert.

NpB (Arizona)
Posts: 605

Posted:

Max: Is the lender cert form a standard issue form that can be found on the internet, like a landlord/tenant agreement, or is custom to each lender?

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By NpB on 11/22/2022 1:35 PM
Max: Is the lender cert form a standard issue form that can be found on the internet, like a landlord/tenant agreement, or is custom to each lender?

My software company provides a standard form to lenders and will customize to those that are specific to certain lenders. The reserve question is something that Freddie Mac and especially Fannie Mae always inquired about back in the early to mid 2000 while I was underwriting loans for Countrywide.

NpB (Arizona)
Posts: 605

Posted:

Quote:

Posted By MaxB4 on 11/22/2022 1:48 PM

Posted By NpB on 11/22/2022 1:35 PM
Max: Is the lender cert form a standard issue form that can be found on the internet, like a landlord/tenant agreement, or is custom to each lender?

My software company provides a standard form to lenders and will customize to those that are specific to certain lenders. The reserve question is something that Freddie Mac and especially Fannie Mae always inquired about back in the early to mid 2000 while I was underwriting loans for Countrywide.

Do you know how current lenders want the reserve study to be?

SheliaH (Indiana)
Posts: 6,964

Posted:

Google is your friend - why not start with reviewing the Fannie Mae lending letter LL-2021-14 and then talk to your association's banker and your reserve specialist? I saw several links you could tap into.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By NpB on 11/21/2022 8:44 PM
I just learned that Freddie Mac now has a standard that established condominium units conduct a reserve study every 3 years. Is there any requirement from lending agencies regarding reserve studies for planned communities (i.e. condos)?

Considering that Freddie and Fannie buy a huge amount of mortgages from mortgage companies, you might as well follow the federal agency requirements, or you can limit future buyers to receiving in-house serviced mortgages from banks.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By KellyM3 on 11/29/2022 8:47 PM

Posted By NpB on 11/21/2022 8:44 PM
I just learned that Freddie Mac now has a standard that established condominium units conduct a reserve study every 3 years. Is there any requirement from lending agencies regarding reserve studies for planned communities (i.e. condos)?

Considering that Freddie and Fannie buy a huge amount of mortgages from mortgage companies, you might as well follow the federal agency requirements, or you can limit future buyers to receiving in-house serviced mortgages from banks.

Actually Freddie a d Fannie are private institutions regulated by the federal government.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By MaxB4 on 11/29/2022 9:11 PM

Posted By KellyM3 on 11/29/2022 8:47 PM

Posted By NpB on 11/21/2022 8:44 PM
I just learned that Freddie Mac now has a standard that established condominium units conduct a reserve study every 3 years. Is there any requirement from lending agencies regarding reserve studies for planned communities (i.e. condos)?

Considering that Freddie and Fannie buy a huge amount of mortgages from mortgage companies, you might as well follow the federal agency requirements, or you can limit future buyers to receiving in-house serviced mortgages from banks.

Actually Freddie a d Fannie are private institutions regulated by the federal government.

If you're not compliant with Freddie and Fannie, then expect a much higher risk of sale closing complications. Fannie and Freddie are NGOs, created to support the housing market by buying mortgages from smaller lenders and brokers. No sure why this is controversial.