source:
  type: guide
  id: fnma-sel-b4-2.2-02
  authority: Fannie Mae Selling Guide B4-2.2-02 — Full Review Process
  description: Fannie Mae Selling Guide B4-2.2-02 — Full Review Process.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-2.2-02-full
  canonical_id: fnma-sel-b4-2.2-02-full
  section: Fannie Mae Selling Guide B4-2.2-02 — Full Review Process
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-2.2-02 — Full Review Process
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B4-2.2-02, Full Review Process (04/02/2025) Introduction This
      topic contains information on general eligibility requirements for the Full
      Review process, including: Overview Unit and Project Types Eligible for Full
      Review Condo Project Manager (CPM) CPM Status Designations CPM Delivery Restrictions
      Notiﬁcations CPM Approved by Fannie Mae Message in DU Additional Obligations
      of the Lender for Projects Approved by Fannie Mae Full Review Eligibility Requirements
      Additional Requirements - For Condo Projects Consisting of Manufactured Homes
      Replacement Reserve Studies Overview Published May 6, 2026 659 The Full Review
      process is a method for the review of new and established condo projects, co-op
      projects, and certain manufactured home projects. Lenders performing a Full
      Review must ensure that the project meets all applicable eligibility requirements.
      Unit and Project Types Eligible for Full Review A Full Review may be performed
      when the unit securing the loan is an attached unit located in one of the following
      project types: an established condo project, or a new or newly converted condo
      project. A Full Review may also be performed when the property securing the
      loan is a manufactured home in an established condo project that is not subject
      to a community land trust, deed restriction, ground lease, or shared equity
      arrangement. These projects may also be reviewed by Fannie Mae through the PERS
      process (see B4-2.2-06, Project Eligibility Review Service (PERS)). Full Review
      requirements for units in co-op projects are addressed in B4-2.3-02, Co-op Project
      Eligibility. Condo Project Manager (CPM) Lenders must use CPM to assist in their
      Full Review of a condo project (except for projects containing manufactured
      homes). CPM is a Web-based tool designed to facilitate the lender''s review
      of the project to determine if it meets Fannie Mae''s project eligibility requirements.
      The lender must complete their own certiﬁcation in CPM and document the loan
      ﬁle with the CPM decision by including the unexpired CPM Certiﬁcation in the
      ﬁle. CPM certiﬁcations are based solely on the data that the lender enters into
      CPM. The lender is responsible for reviewing the applicable project documentation
      to obtain the information needed to complete the project review and enter the
      data into CPM. The lender is also responsible for ensuring that all data entered
      into CPM is correct and that the project meets all applicable Fannie Mae eligibility
      requirements. CPM is available on Fannie Mae''s website. CPM Status Designations
      The table below describes the status designations that are available in CPM
      for each project. Status Designation Deﬁnition Certiﬁed by Lender Loans in the
      project are eligible for sale by the certifying lender prior to the expiration
      date. Published May 6, 2026 660 Status Designation Deﬁnition Approved by Fannie
      Mae Project has been approved by Fannie Mae, and loans may be sold by the lender
      with a valid and unexpired approval. This status may include projects approved
      through the PERS or other Fannie Mae approval processes. Conditional Approval
      Project has been approved by Fannie Mae through the PERS process subject to
      certain conditions being met. Loans in this project cannot be sold to Fannie
      Mae until an Approved by Fannie Mae status has been issued. No Fannie Mae Review
      Lender can certify the project or subject legal phase based on the Selling Guide
      requirements. Unavailable Project has been determined by Fannie Mae to be ineligible.
      Loans for units in this project cannot be sold to Fannie Mae. Guide Ineligible
      Based on information entered in CPM by the lender, loans in this project are
      not eligible for sale to Fannie Mae. Incomplete Certiﬁcation Project has been
      entered into CPM, but the lender''s certiﬁcation process has not been completed.
      The required information must be entered into CPM for the lender to determine
      the project''s eligibility. CPM Delivery Restrictions Notiﬁcations Project transaction
      eligibility or other loan-level restrictions will display in CPM and/or the
      DU Underwriting Findings report, when applicable. When CPM displays a delivery
      restriction for a speciﬁc project, lenders may only sell loans that comply with
      the stated restrictions, even if the loan receives a CPM Approved by Fannie
      Mae message in DU. For example, loans in some projects may be limited to certain
      occupancy types (such as principal residences only, or principal residences
      and second homes), or there may be limits on the LTV ratios. CPM Approved by
      Fannie Mae Message in DU A loan submitted to DU will retain its Fannie Mae project
      approval status through the credit report expiration Published May 6, 2026 661
      date speciﬁed on the DU Underwriting Findings report, provided it receives both:
      an Approve/Eligible recommendation, and a message indicating the project has
      an Approved by Fannie Mae status in CPM. When any of the following are changed
      by the lender when the loan caseﬁle is resubmitted to DU, the project eligibility
      status may change and result in the loss of the CPM Approved by Fannie Mae message:
      CPM ID, project name, property address (state or zip code), or credit report.
      As with any other projects with an Approved by Fannie Mae status in CPM, lenders
      are required to validate compliance with all applicable insurance requirements
      outlined in Selling Guide Chapter B7-3, Property and Flood Insurance and Chapter
      B7-4, Liability and Fidelity/Crime Insurance Requirements. Also, see Additional
      Obligations of the Lender for Projects Approved by Fannie Mae below for additional
      requirements. Note: The loan is subject to delivery restrictions in CPM that
      may aﬀect the loan''s eligibility, even if the loan has received the CPM Approved
      by Fannie Mae message in DU. Additional Obligations of the Lender for Projects
      Approved by Fannie Mae If a lender becomes aware of any information that could
      impact the eligibility status reﬂected in CPM (such as, signiﬁcant deferred
      maintenance or major litigation), the lender must notify the CPM Management
      team (see E-1-02, List of Contacts) with the relevant data and information.
      Fannie Mae will evaluate the new information and its impact on eligibility.
      Before selling a loan secured by a unit in such a project, the lender must conﬁrm
      that the project retains its approved status as of the note date, unless a loan
      has received and retains a CPM Approved by Fannie Mae message in DU. Notiﬁcation
      must occur as soon as practicable but no later than ﬁve business days after
      becoming aware of such information. Fannie Mae reserves the right to change
      a project eligibility status designation if information acquired after approval
      or certiﬁcation has an impact on a previously issued eligibility determination.
      Note: Lenders are responsible for verifying and documenting that the project
      meets the applicable insurance requirements described in Chapters B7-3 and B7-4.
      Fannie Mae does not review insurance policies as part of the review process,
      including when the loan has received a CPM Approved by Fannie Mae message in
      DU. Full Review Eligibility Requirements When determining the eligibility of
      a condo project on the basis of a Full Review, lenders must ensure the condo
      project meets the eligibility requirements described in the following table.
      Published May 6, 2026 662 ✓ Full Review Eligibility Requirements The project
      meets the Requirements Applicable to All Properties in a Condo, Co-op, or PUD
      Project described in B4-2.1-01, General Information on Project Standards. The
      project must not be an ineligible project as described in B4-2.1-03, Ineligible
      Projects. No more than 15% of the total units in a project are 60 days or more
      past due on common expense assessments (also known as HOA fees). For example,
      a 100–unit project may not have more than 15 units that are 60 days or more
      past due. This ratio is calculated by dividing the number of units with common
      expense assessments that are past due by 60 or more days by the total number
      of units in the project. No more than 15% of the total units in a project are
      60 days or more past due in the payment of each special assessment. Published
      May 6, 2026 663 ✓ Full Review Eligibility Requirements Lenders must review the
      HOA projected budget to determine that it • is adequate (that is, it includes
      allocations for line items pertinent to the type of condo project), and • provides
      for the funding of replacement reserves for capital expenditures and deferred
      maintenance that is at least 10% of the budget. To determine whether the association
      has a minimum annual budgeted replacement reserve allocation of 10%, the lender
      must divide the annual budgeted replacement reserve allocation by the association’s
      annual budgeted assessment income (which includes regular common expense fees).
      The following types of income may be excluded from the reserve calculation:
      • incidental income on which the project does not rely for ongoing operations,
      maintenance, or capital improvements; • income collected for utilities that
      would typically be paid by individual unit owners, such as cable TV or Internet
      access; • income allocated to reserve accounts; and • special assessment income.
      The lender may use a reserve study in lieu of calculating the replacement reserve
      of 10% provided the following conditions are met: • the lender obtains a copy
      of an acceptable reserve study and retains the study and the lender’s analysis
      of the study in the project approval ﬁle, • the study demonstrates that the
      project has adequate funded reserves that provide ﬁnancial protection for the
      project equivalent to Fannie Mae’s standard reserve requirements, • the study
      demonstrates that the project’s funded reserves meet or exceed the recommendations
      included in the reserve study, and • the study meets Fannie Mae’s requirements
      for replacement reserve studies listed at the end of this section. For projects
      in which the units are not separately metered for utilities, the lender must
      • determine that having multiple units on a single meter is common and customary
      in the local market where the project is located, and • conﬁrm that the project
      budget includes adequate funding for utility payments. The project must be located
      on contiguous parcels of land. It is acceptable for a project to be divided
      by public or private streets. The structures within the project must be within
      a reasonable distance from each other. Published May 6, 2026 664 ✓ Full Review
      Eligibility Requirements Common elements and facilities, such as recreational
      facilities and parking, must be consistent with the nature of the project and
      competitive in the marketplace. Unit owners in the project must have the sole
      ownership interest in, and rights to the use of the project’s facilities, common
      elements, and limited common elements, except as noted below. Shared amenities
      are permitted only when two or more HOAs share amenities for the exclusive use
      of the unit owners. The associations must have an agreement in place governing
      the arrangement for shared amenities that includes the following: • a description
      of the shared amenities subject to the arrangement; • a description of the terms
      under which unit owners in the project may use the shared amenities; • provisions
      for the funding, management, and upkeep of the shared amenities; and • provisions
      to resolve conﬂicts between the associations over the amenities. Examples of
      shared amenities include, but are not limited to, clubhouses, recreational or
      ﬁtness facilities, and swimming pools. The developer may not retain any ownership
      interest in any of the facilities related to the project. The amenities and
      facilities—including parking and recreational facilities—may not be subject
      to a lease between the unit owners or the HOA and another party. Parking amenities
      provided under commercial leases or parking permit arrangements with parties
      unrelated to the developer are acceptable. Fannie Mae permits the ﬁnancing of
      a single or multiple parking space(s) with the mortgage provided that the parking
      space(s) and subject unit are included on one deed as evidenced on the legal
      description in the mortgage. In such cases, the LTV, CLTV, and HCLTV ratios
      are based on the combined value of the residential unit and the parking space(s).
      Phase I and II environmental hazard assessments are not required for condo projects
      unless the lender identiﬁes an environmental problem through the performance
      of its project underwriting or due diligence. In the event that environmental
      problems are identiﬁed, the problems must be acceptable, as described in E-2-02,
      Suggested Format for Phase I Environmental Hazard Assessments. Published May
      6, 2026 665 ✓ Full Review Eligibility Requirements For investment property transactions
      in established projects at least 50% of the total units in the project must
      be conveyed to principal residence or second home purchasers. This requirement
      does not apply if the subject mortgage is for a principal residence or second
      home. Financial institution-owned REO units that are for sale (not rented) are
      considered owner- occupied when calculating the 50% owner-occupancy ratio requirement.
      If the project was a gut rehabilitation project, all rehabilitation work involved
      in a condo conversion must have been completed in a professional manner. “Gut
      rehabilitation” refers to the renovation of a property down to the shell of
      the structure, including the replacement of all HVAC and electrical components
      (unless the HVAC and electrical components are up to current code). For a conversion
      that was legally created during the past three years, the architect’s or engineer’s
      report (or functional equivalent), that was originally obtained for the conversion
      must comment favorably on the structural integrity of the project and the condition
      and remaining useful life of the major project components, such as the heating
      and cooling systems, plumbing, electrical systems, elevators, boilers, roof,
      etc. For additional information applicable to condo projects subject to a ground
      lease, see B2-3-03, Special Property Eligibility and Underwriting Considerations:
      Leasehold Estates. Note: If the project is a newly converted non-gut rehabilitation
      project with more than four residential units, lenders must submit the project
      to Fannie Mae for review and approval. See B4-2.2-06, Project Eligibility Review
      Service (PERS), for additional information. Additional Requirements - For Condo
      Projects Consisting of Manufactured Homes When determining the eligibility of
      condo project consisting of manufactured homes on the basis of a Full Review,
      lenders must ensure the property and project meet the eligibility requirements
      described in the following table. ✓ Additional Requirements for Condo Projects
      Consisting of Manufactured Home Units As described in B4-2.2-06, Project Eligibility
      Review Service (PERS), certain manufactured home projects must be submitted
      to PERS. Lenders must perform a pre-PERS submission review to conﬁrm the project
      meets the Full Review and other requirements. Published May 6, 2026 666 ✓ Additional
      Requirements for Condo Projects Consisting of Manufactured Home Units The condo
      project must meet all Full Review requirements, as applicable. CPM should not
      be used to complete the Full Review because it does not contain all the requirements
      that apply to condo projects consisting of manufactured homes. The project must
      not contain campgrounds or other facilities for transient or mobile units. The
      project legal documents must require a provision for land-lease “hold-out” units
      to be converted into the condo structure upon transfer, sale, or reﬁnance of
      property. Land lease “hold-out” units are limited to 25% or less of the total
      units in the project. Land-lease hold-out units are units where the structure
      is owned by an individual, but the land is leased from the HOA or project sponsor.
      These units were not converted to condo ownership when the project converted
      to a condo regime. Replacement Reserve Studies Reserve studies may be used to
      determine the appropriate level of reserves the HOA must maintain to ensure
      the project’s long-term success. Reserve studies will also provide useful information
      regarding the adequacy of the HOA’s current reserve funds and oﬀer recommendations
      to meet funding goals in the event the HOA has under-reserved for its needs
      in the past. The lender may review the most current reserve study or a reserve
      study update provided it has been completed within three years of the date on
      which the lender approves the project. Reserve studies must be prepared by an
      independent third party that has speciﬁc expertise in completing reserve studies.
      This expertise may include any of the following: a reserve study professional
      with reserve study credentials, a construction engineer, a certiﬁed public accountant
      who specializes in reserve studies, or any professional with demonstrated knowledge
      of and experience in completing reserve studies. While Fannie Mae does not require
      that a standard format be used for the reserve study, the following items must
      be addressed: all major components and elements of the project’s common areas
      for which repair, maintenance, or replacement is expected; the condition and
      remaining useful life of each major component; an estimate of the cost of repair,
      replacement, restoration, or maintenance of major components; an estimate of
      the total annual contributions required to defray costs (minus the existing
      reserves funded for this purpose), including inﬂation; an analysis of existing
      funded reserves; and a suggested reserve funding plan. Note: Individual states
      may have various statutes concerning the use and content of reserve studies.
      Published May 6, 2026 667 Fannie Mae requires that a reserve study used by the
      lender in its analysis meet or exceed requirements set forth in relevant state
      statutes. Recent Related Announcements The table below provides references to
      the Announcements that are related to this topic. Announcements Issue Date Announcement
      SEL-2025-02 April 02, 2025 Announcement SEL-2024-07 November 06, 2024 Announcement
      SEL-2023-06 July 05, 2023 Announcement SEL-2023-02 March 01, 2023 Announcement
      SEL-2022-02 March 02, 2022 B4-2.2-03, Full Review: Additional Eligibility Requirements
      for Units in New and Newly Converted Condo Projects (06/05/2018) Introduction
      This topic contains information on the Full Review of units in new and newly
      converted condo projects, including: Additional Requirements for Units in New
      and Newly Converted Condo Projects Condo Project Legal Document Review Requirements
      for Units in New or Newly Converted Projects Additional Requirements for Units
      in New and Newly Converted Condo Projects When performing a Full Review of new
      or newly converted condo projects, lenders must ensure compliance with the following
      additional requirements. Note: Projects consisting of units in new or newly
      converted projects in Florida must be reviewed by Fannie Mae through the PERS
      process. See B4-2.2-04, Geographic-Speciﬁc Condo Project Considerations. Published
      May 6, 2026 668 ✓ Full Review Requirements – For Units in New or Newly Converted
      Condo Projects The project, or the subject legal phase, must be “substantially
      complete” unless other completion arrangements have been approved by Fannie
      Mae through the PERS review process. There may not be more than one legal phase
      per building. “Substantially complete” means that • a certiﬁcate of occupancy
      or other substantially similar document has been issued by the applicable governmental
      agency for the project or subject phase; and • all the units and buildings in
      the legal phase in which the unit securing the mortgage is located are complete,
      subject to the installation of buyer selection items, such as appliances. Note:
      Fannie Mae does not require the installation of typical buyer selection items
      such as appliances, ﬂoor coverings, counter tops, or light ﬁxtures that are
      common and customary for the market, although buyer selections that involve
      the modiﬁcation of a unit ﬂoor plan must be complete. Lenders are expected to
      obtain appropriate documentation to verify that all buyer selection items for
      the unit being ﬁnanced are properly installed prior to closing. At least 50%
      of the total units in the project or subject legal phase must have been conveyed
      or be under contract for sale to principal residence or second home purchasers.
      • For a speciﬁc legal phase or phases in a new project, at least 50% of the
      total units in the subject legal phase(s), considered together with all prior
      legal phases, must have been conveyed or be under contract for sale to principal
      residence or second home purchasers. • For the purposes of this review process,
      a project consisting of one building cannot have more than one legal phase.
      Individual units in new condo projects must be available for immediate occupancy
      at the time of loan closing. If the project is part of a larger development,
      and the unit owners are required to pay monthly assessments of more than $50
      to a separate master association for that development, lenders must review the
      overall development plan for the master association to evaluate the acceptability
      of the project. The overall development plan of the project must be reviewed
      and the following must be acceptable: • consistency of future and existing improvements,
      • time limitations for expansion, and • reciprocal easements between legal phases.
      Published May 6, 2026 669 ✓ Full Review Requirements – For Units in New or Newly
      Converted Condo Projects For projects (or the subject legal phase) that are
      only substantially complete rather than 100% complete, lenders must determine
      that acceptable completion assurance arrangements that guarantee the future
      completion of all project facilities, common elements, and limited common elements
      have been provided. These assurance arrangements may include • cash deposits,
      • letters of credit, • assignments of certiﬁcates of deposit, or • assignments
      of other assets that can be easily converted to cash. Similar arrangements must
      be provided to support assurances against construction and structural defects.
      The assurances must • protect each unit against defects that become apparent
      within one year from the date of its settlement, and • cover all common facilities
      for one year from the date on which units that represent at least 60% of the
      votes in the HOA have been transferred. The developer or sponsor should provide
      for and promote the unit owners’ early participation in the management of the
      project. The project must meet the condo project legal document requirements
      in the following section. Condo Project Legal Document Review Requirements for
      Units in New or Newly Converted Projects The table below provides Fannie Mae''s
      requirements for the review of the condo project''s legal documents for units
      in new and newly converted condo projects containing more than four residential
      units. Condo Project Legal Document Review Requirements - For Units in New or
      Newly Converted Condo Projects Limitations on Ability to Sell/Right of First
      Refusal Any right of ﬁrst refusal in the condo project documents will not adversely
      impact the rights of a mortgagee or its assignee to: • foreclose or take title
      to a condo unit pursuant to the remedies in the mortgage, • accept a deed or
      assignment in lieu of foreclosure in the event of default by a mortgagor, or
      • sell or lease a unit acquired by the mortgagee or its assignee. Published
      May 6, 2026 670 Condo Project Legal Document Review Requirements - For Units
      in New or Newly Converted Condo Projects Rights of Condo Mortgagees and Guarantors
      The project documents must give the mortgagee and guarantor of the mortgage
      on any unit in a condo project the right to timely written notice of: • any
      condemnation or casualty loss that aﬀects either a material portion of the project
      or the unit securing its mortgage; • any 60-day delinquency in the payment of
      assessments or charges owed by the owner of any unit on which it holds the mortgage;
      • a lapse, cancellation, or material modiﬁcation of any insurance policy maintained
      by the homeowners’ association; and • any proposed action that requires the
      consent of a speciﬁed percentage of mortgagees. First Mortgagee’s Rights Conﬁrmed
      No provision of the condo project documents gives a condo unit owner or any
      other party priority over any rights of the ﬁrst mortgagee of the condo unit
      pursuant to its mortgage in the case of payment to the unit owner of insurance
      proceeds or condemnation awards for losses to or a taking of condo units and/or
      common elements. Published May 6, 2026 671 Condo Project Legal Document Review
      Requirements - For Units in New or Newly Converted Condo Projects Amendments
      to Documents Required provisions related to amendments to project documents
      are as follow: • The project documents must provide that amendments of a material
      adverse nature to mortgagees be agreed to by mortgagees that represent at least
      51% of the votes of unit estates that are subject to mortgages. • The project
      documents must provide for any action to terminate the legal status of the project
      after substantial destruction or condemnation occurs or for other reasons to
      be agreed to by mortgagees that represent at least 51% of the votes of the unit
      estates that are subject to mortgages. • The project documents may provide for
      implied approval to be assumed when a mortgagee fails to submit a response to
      any written proposal for an amendment within 60 days after it receives proper
      notice of the proposal, provided the notice was delivered by certiﬁed or registered
      mail, with a return receipt requested. Notwithstanding the foregoing, project
      documents that were recorded prior to August 23, 2007, may provide for implied
      approval to be assumed when a mortgagee fails to submit a response to any written
      proposal for an amendment within 30 days after it receives proper notice of
      the proposal, provided the notice was delivered by certiﬁed or registered mail,
      with a return receipt requested. Recent Related Announcements There are no recently
      issued Announcements related to this topic.'
  judgment: false
