source:
  type: guide
  id: fnma-sel-b4-2.2-05
  authority: Fannie Mae Selling Guide B4-2.2-05 — FHA-Approved Condo Review Eligibility
  description: Fannie Mae Selling Guide B4-2.2-05 — FHA-Approved Condo Review Eligibility.
  coverage_tier: operative
obligations:
- id: fnma-sel-b4-2.2-05-full
  canonical_id: fnma-sel-b4-2.2-05-full
  section: Fannie Mae Selling Guide B4-2.2-05 — FHA-Approved Condo Review Eligibility
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B4-2.2-05 — FHA-Approved Condo Review Eligibility
    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: 'B4-2.2-05, FHA-Approved Condo Review Eligibility (09/04/2018)
      Introduction This topic contains information on FHA-approved condo review eligibility,
      including: Overview Project Requirements Document Retention Overview Fannie
      Mae accepts delivery of FHA mortgage loans in FHA-approved condo projects that
      appear on the FHA- approved condo list. For conventional mortgage loans, Fannie
      Mae will accept delivery of mortgages in established projects on the FHA-approved
      list provided the approval was completed by FHA HUD Review and Approval Process
      (HRAP) rather than through an FHA Direct Endorsement Lender Review and Approval
      Process (DELRAP). FHA condo project approval is not acceptable for conventional
      mortgage loans secured by units in new or newly converted condo projects. Lenders
      may search for FHA-approved condo projects by location, name, or project status
      online at HUD.gov or through CPM. Published May 6, 2026 674 Lenders must maintain
      copies of the FHA approval documentation in the loan ﬁle. Project Requirements
      For FHA mortgage loans, lenders must ensure that the FHA standard conditions
      have been met for presale, occupancy status, and completion; any additional
      conditions noted by FHA have been met; the project is not an ineligible project
      as deﬁned in B4-2.1-03, Ineligible Projects; the project is covered by the required
      insurance as set forth in Subpart B7-4, Liability and Fidelity/Crime Insurance
      Requirements for Project Developments; and the project is not comprised of manufactured
      homes. For conventional mortgage loans, lenders must ensure that the project
      meets Fannie Mae’s criteria to be considered an established project; the project
      is not comprised of manufactured homes; 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 is not an ineligible project
      as described in B4-2.1-03, Ineligible Projects; and any additional conditions
      noted by FHA have been met. Document Retention When lenders deliver mortgage
      loans secured by condo units in an FHA-approved project, lenders must retain
      the documentation as set forth in Document Retention in B4-2.1-01, General Information
      on Project Standards. Recent Related Announcements There are no recently issued
      Announcements related to this topic. B4-2.2-06, Project Eligibility Review Service
      (PERS) (06/04/2025) Introduction This topic contains information on Fannie Mae''s
      Project Eligibility Review Service (PERS), including: Overview Standard PERS
      Submission Process Required Forms for Standard PERS Submission Additional Requirements—For
      Newly Converted Non-Gut Rehabilitation Condo or Co-op Projects Published May
      6, 2026 675 Additional Requirements - For Condo and PUD Projects Comprised of
      Manufactured Homes Streamlined PERS Submission Process—For Established Projects
      Approval Designations Availability of Project Information Decision Expiration
      Dates Uniform Appraisal Dataset (UAD) 3.6 Policy Overview PERS is a review method
      available to lenders to submit new, newly converted, and established projects
      to Fannie Mae to determine eligibility. Some projects must be submitted to PERS
      while a PERS submission is optional for other projects, as shown in the table
      below. Standard PERS Process Streamlined PERS Process Required for: • new condo
      projects consisting of manufactured homes (including those subject to a community
      land trust, deed restrictions, ground lease, or shared equity arrangement);
      • new PUD projects consisting of manufactured homes subject to a community land
      trust, deed restriction, ground lease, or shared equity arrangement; • newly
      converted non-gut rehabilitation condo and co-op projects with attached units
      that contain more than four units; • new and newly converted condo projects
      consisting of attached units located in Florida; and • limited or shared equity
      co-op projects, provided the limited or shared equity provisions are designed
      to preserve or promote access to aﬀordable housing. Optional for: • all other
      new or newly converted condo projects not listed above. Required for: • established
      condo projects consisting of single- width manufactured homes; and • established
      condo or established PUD projects consisting of manufactured homes subject to
      a community land trust, deed restriction, ground lease, or shared equity arrangement.
      Optional for: • established condo projects. Note: Unless speciﬁcally noted in
      the above table, all references to manufactured homes may be single-width, multi-width,
      or a combination of both. Standard PERS Submission Process Published May 6,
      2026 676 The standard PERS submission process is described below: Step Action
      1. The lender performs a review to determine if the project satisﬁes all applicable
      Fannie Mae project eligibility and underwriting requirements of the Full Review
      process prior to submission to PERS. See below for additional lender pre-PERS
      submission review requirements • for newly converted non-gut rehabilitation
      condo projects, and • for projects consisting of manufactured homes. 2. The
      lender completes a project submission package, that includes: • Project Eligibility
      Review Service Document Checklist (Form 1030) for condo projects or Project
      Eligibility Review Service Document Checklist - Co-op Projects (Form 1078),
      for co-op projects, and • Application for Project Approval (Form 1026). See
      below for additional forms that may be required. 3. The condo project''s legal
      documents must comply with the Fannie Mae''s requirements listed in B4-2.2-03,
      Full Review: Additional Eligibility Requirements for Units in New and Newly
      Converted Condo Projects. • A qualiﬁed attorney engaged by the lender must review
      the condo project legal documents and determine that the documents are in compliance
      with Fannie Mae''s requirements. • This determination must be documented by
      the attorney in writing but need not rise to the level of a formal, written
      legal opinion. The attorney may be the same person who prepared the legal documents
      or an attorney employed by the lender, but they cannot be an employee, principal,
      or oﬃcer of the developer or sponsor of the project. • The lender must complete
      the Warranty of Condominium Project Legal Documents (Form 1054) and attach the
      attorney review as part of the PERS submission process. 4. The lender submits
      the complete project package, including all relevant supporting documentation,
      via email using the PERS Project Submission mailbox. See E-1-02, List of Contacts.
      5. A member of the Project Standards team reviews the package to determine if
      the project is eligible for approval. Published May 6, 2026 677 Step Action
      6. Upon completion of the review, Fannie Mae issues its decision to the lender
      via email and posts approved projects on its website. See Condo, Co-op, and
      Planned Unit Development (PUD) Eligibility for approved projects listed for
      each state, the District of Columbia, and the U.S. Virgin Islands. 7. Fannie
      Mae informs the lender of the speciﬁc review fee assessed for each PERS submission.
      Lenders are billed for PERS review fees in their “Monthly Technology Invoice.”
      For fees, see the Project Eligibility Review Service (PERS) Overview on Fannie
      Mae''s website. Required Forms for Standard PERS Submission The forms shown
      below are required for a standard PERS submission. Form Title Description 1026
      Application for Project Approval Requires certiﬁcation that the lender has “underwritten”
      the project; includes non-residential space, common areas, sales plan, construction
      warranty, budget, builder/developer information, status of construction, environmental
      issues, resale restrictions, phasing, project management. 1029 Warranty of Project
      Presales Requires lender certiﬁcation of sales and presales information. 1030
      Project Eligibility Review Service Document Checklist Checklist conﬁrming all
      required condo documents have been provided (see below). 1051 Project Development/Master
      Association Plan Requires lender certiﬁcation of submitted information; includes
      master association and sub- association description and structure, common areas,
      title policy, master association budget, “as- built” survey or master plan.
      1054 Warranty of Condominium Project Legal Documents Requires lender certiﬁcation
      of compliance with laws and Fannie Mae legal requirements. Published May 6,
      2026 678 Form Title Description 1071 Statement of Insurance and Fidelity Coverage
      Requires lender certiﬁcation of all insurance requirements; addresses speciﬁc
      insurance types and clauses, and requires the lender to obtain and review all
      policies. 1073 Individual Condominium Unit Appraisal Individual condominium
      appraisal report. 1073A Analysis of Annual Income and Expenses – Operating Budget
      Requires lender certiﬁcation that the operating budget has been analyzed; detailed
      operating budget information to be completed by HOA and lender. 1078 Project
      Eligibility Review Service Document Checklist - Co-op Projects Checklist conﬁrming
      all required co-op documents have been provided (see below). 1079 Limited or
      Shared Equity Co-op Worksheet Requires information for certain co-op projects.
      1081 Final Certiﬁcation of Substantial Project Completion Lender certiﬁcation
      that project is substantially complete; lender to document any exceptions or
      uncompleted. Additional Requirements—For Newly Converted Non-Gut Rehabilitation
      Condo or Co-op Projects A non-gut rehabilitation refers to the renovation of
      a property that does not involve structural or functional changes, such as the
      replacement of all HVAC and electrical components. Rather, the rehabilitation
      might include, for example, the replacement of appliances and carpeting. In
      order for a newly converted non-gut rehabilitation condo or co-op project to
      receive project approval through the standard PERS process, the project must
      comply with the following requirements. ✓ Lender Pre-PERS Submission Review
      Requirements – For Newly Converted Non-Gut Rehabilitation Condo or Co-op Projects
      The project cannot be an ineligible project in accordance with B4-2.1-03, Ineligible
      Projects. Published May 6, 2026 679 ✓ Lender Pre-PERS Submission Review Requirements
      – For Newly Converted Non-Gut Rehabilitation Condo or Co-op Projects For condo
      projects—The condo project must comply with all requirements of the Full Review
      (as provided in B4-2.2-02, Full Review Process and B4-2.2-03, Full Review: Additional
      Eligibility Requirements for Units in New and Newly Converted Condo Projects).
      For co-op projects—The co-op project must comply with all requirements for co-op
      projects (as provided in B4-2.3-02, Co-op Project Eligibility, and B4-2.3-03,
      Legal Requirements for Co-op Projects). All rehabilitation work involved in
      the condo or co-op conversion must have been completed in a professional manner.
      A current reserve study prepared by a qualiﬁed, independent professional company,
      accompanied by an engineer''s report, or functional equivalent, must comment
      favorably on the structural integrity of the project and the remaining useful
      life of the major project components. The project budget must contain line items
      for • reserves to adequately support the costs identiﬁed in the reserve study,
      and • a utility contingency of at least 10% of the previous year''s utility
      costs if the utilities are not separately metered. Funds to cover the total
      cost of any items identiﬁed in the reserve study or engineer''s report that
      need to be replaced within ﬁve years from the date of the study must be deposited
      in the reserve account of the HOA or of the co-op corporation, in addition to
      the amount stated immediately above. The developer must provide a detailed description
      of the work proposed or already completed in order for the project units to
      be ready for sale. Generally, at least 50% of the total condo units or co-op
      stocks or shares in the project or subject legal phase must have been conveyed
      or be under contract for purchase to principal residence or second home purchasers.
      Up to 30% of the units (or of stocks or shares for co-ops) in projects that
      are subject to rent regulations, which protect tenants from eviction (if they
      have chosen not to purchase their unit), will be permitted. Phasing of projects
      (single building or multiple buildings) will be considered on a project basis.
      Published May 6, 2026 680 ✓ Lender Pre-PERS Submission Review Requirements –
      For Newly Converted Non-Gut Rehabilitation Condo or Co-op Projects The project
      sponsor or developer must provide a comprehensive sales and marketing strategy.
      All projects are subject to a site inspection. Additional Requirements - For
      Condo and PUD Projects Comprised of Manufactured Homes For a condo or PUD project
      comprised of manufactured homes to receive project approval through the standard
      PERS process, the project must comply with the following requirements. ✓ Lender
      Pre-PERS Submission Review Requirements - For Projects Consisting of Manufactured
      Homes Review all aspects of the project to determine that it satisﬁes Fannie
      Mae eligibility requirements as stated in B4-2.1-01, General Information on
      Project Standards. Review all aspects of the project to determine that it meets
      all eligibility requirements for the Full Review for condos, requirements for
      PUDs, and any other applicable requirements. Review the manufactured housing
      unit to conﬁrm that it meets all requirements of B4-1.4-01, Factory-Built Housing:
      Manufactured Housing. Perform a thorough underwriting analysis of the project
      and provide the conclusion of such analysis. Note: If the project is subject
      to a ground lease, the ground lease must meet the eligibility requirements in
      B2-3-03, Special Property Eligibility and Underwriting Considerations: Leasehold
      Estates. Streamlined PERS Submission Process—For Established Projects The streamlined
      PERS submission process for established condo projects is as follows: Step Action
      1. The lender performs a basic review to determine if the project satisﬁes all
      applicable Fannie Mae project eligibility and underwriting requirements prior
      to submission to PERS. Published May 6, 2026 681 Step Action 2. The lender completes
      a project submission package, which includes: • Application for Approval of
      Established Project (Form 1091). • Condominium Project Questionnaire (Form 1076),
      or a substantially similar form, completed within the past 180 days. • An appraisal
      report for a representative unit in the project. This report must be prepared
      within 120 days of the PERS application, and include photographs of the project,
      private streets, recreational amenities, parking, commercial space, and common
      areas. • Current ﬁscal year’s approved operating budget that reﬂects homeowners’
      association income and expenses. • Reserve study completed within the past 24
      months (only required for projects that are not funding a minimum of a 10% dedicated
      expense allocation in the budget to a replacement reserve for the future repair/replacement
      of the project’s major components). 3. The lender submits the complete project
      package, including all relevant supporting documentation, via email using the
      PERS Project Submission mailbox. See E-1-02, List of Contacts. 4. A member of
      the Project Standards team reviews the package to determine if the project is
      eligible for approval. 5. Upon completion of the review, Fannie Mae issues its
      decision to the lender via email and posts approved projects on its website.
      See Condo, Co-op, and Planned Unit Development (PUD) Eligibility for approved
      projects listed for each state, the District of Columbia, and the U.S. Virgin
      Islands. 6. Fannie Mae informs the lender of the speciﬁc review fee assessed
      for each PERS submission. Lenders are billed for PERS review fees in their “Monthly
      Technology Invoice.” For fees, see the Project Eligibility Review Service (PERS)
      Overview on Fannie Mae''s website. Fannie Mae reserves the right to request
      additional documentation it deems necessary to conduct a full review of the
      project. Approval Designations Upon completion of its review, Fannie Mae will
      issue one of the following project approval designations: Conditional Project
      Approval, Final Project Approval, Ineligible, or Published May 6, 2026 682 Suspension
      of the Application. Loans delivered with a PERS review must have a valid Fannie
      Mae Final Project Approval prior to delivery. Loans may not be delivered under
      the Conditional Project Approval, Ineligible, or Suspension of the Application
      designations. Availability of Project Information Lenders submitting projects
      to PERS must ensure that the developer, builder, management company, and/or
      HOA will provide project information to Fannie Mae as and when requested without
      charge. In the event the requested information is not provided, Fannie Mae reserves
      the right to withdraw the PERS approval. Decision Expiration Dates Conditional
      Project Approval: expires 9 months from the date of issue. Final Project Approval:
      expires 18 months from the date of issue. Note: Fannie Mae, in some instances
      and in its sole discretion, may set a shorter or longer expiration term. For
      information on requesting an extension, see the Project Eligibility Review Service
      (PERS) Overview on Fannie Mae''s website. Uniform Appraisal Dataset (UAD) 3.6
      Policy Lenders using UAD 3.6 must follow the requirements in the UAD 3.6 Policy
      Supplement. Recent Related Announcements The table below provides references
      to recently issued Announcements that are related to this topic. Announcements
      Issue Date Announcement SEL-2025-04 June 04, 2025 Announcement SEL-2024-07 November
      06, 2024 Announcement SEL-2021-11 December 15, 2021 Announcement SEL-2021-03
      April 07, 2021 Published May 6, 2026 683'
  judgment: false
