4 Changes Fannie and Freddie Have Made on Condo Building Policy
The number of condominium and homeowner associations (COAs) is expected to rise from 365,000 in 2023 to as many as 370,000 in 2024, comprising nearly one-third of the U.S. home inventory, according to a recent study and forecast by the Foundation for Community Association Research. Community associations account for about 30% of the overall housing stock, which includes many new construction homes and a significant number of buildings over 40 years old, stated CAI Chief Strategy Officer Dawn Bauman. In the wake of the tragic Surfside, Florida condominium collapse that killed 98 people three years ago, policies regarding condo building safety have undergone significant changes. Fannie Mae and Freddie Mac have introduced stricter condo safety policies, such as broader use of attorney title opinion letters and improved transparency through an online tool for COAs to check project ineligibility information. While one-third of title claims involve issues not found in routine searches, the cost of insurance coverage has decreased by almost 8% since 2004. "Seller-pay" regimes in many states help minimize buyer costs for insurance. However, according to the American Land Title Association (ALTA), condos remain particularly vulnerable to risks.