Fannie Mae is a government-sponsored enterprise that buys mortgages and sets standards that condo and co-op buildings must meet for their units to be easily financeable.
Why It Matters Financially
An association’s compliance with Fannie Mae standards, including adequate reserves, affects owners’ ability to sell and refinance units. Reserve financing can help a building meet these requirements.
Example Use Case
An association funds its reserves to meet Fannie Mae standards so owners can obtain conventional mortgages.
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Related Terms
Freddie Mac, FHA Approval, Reserve Fund, Percent Funded, Master Insurance Policy