Champlain Towers South Triggers New Mortgage Lender Rules for Condos

The Champlain Towers South tragedy now impacts a buyer’s ability to obtain financing for the purchase of a condominium. Shaken by the disaster stemming from deferred structural maintenance, Freddie Mac and Fanny Mae, the two federally chartered corporations that help determine whether lenders can issue mortgages, are now, for the first time, requiring lenders to evaluate the condition of a building prior to approving a loan.  These companies will no longer back mortgages if, among other things, unfinished “critical repairs” or material deficiencies (such as mold or water intrusion) remain. Although such conditions may tighten the ability to obtain a loan and therefore impact sales, the hope is that Florida’s massive condominium population will be forced to address dangerous conditions – if not for their own safety than for maintaining the value of their investment. Sadly, it appears that money may be the motivating push to keep these buildings safe for occupancy.