Letter to Hugh Frater, CEO of Fannie Mae, and David Brickman, CEO of Federal Home Loan Mortgage Corporation - Rep. Shalala leads Florida Delegation in Demanding Freddie Mac and Fannie Mae Change Florida Condo-Lending Practices

Letter

Today, U.S. Rep. Donna Shalala (D-FL) led the entire Florida Congressional delegation in demanding that the GSEs, Fannie Mae and Freddie Mac, reevaluate their loan-to-value requirements for Florida condominiums so that they align with nationwide condominium underwriting standards, which allow buyers in all other states to put a 10 percent down payment on their condominiums, versus the 25 percent down payment requirement applicable only in Florida.

"Over a decade ago, Florida was ground zero for the sub-prime mortgage crisis that plunged the United States into the greatest economic downturn since the Great Depression," said Rep. Shalala. "At the time, imposing more stringent underwriting standards made sense."

"Now though, Florida has seen tremendous growth and recovery in its condominium market. The loan-to-value maximums commanded by Fannie Mae and Freddie Mac are hurting first time home buyers and worsening the affordable housing crisis across our state. Adjusting the loan-to-value requirements for condominiums in Florida a decade after the Great Recession makes sense and will help bring thousands of families closer to living the American dream."

Florida is currently the only state in the nation subject to a 75 percent maximum loan-to-value ratio for condominium units certified under the limited or streamline review process. This lending requirement has had a significant impact on South Florida, where condominium units make up the majority of the residential housing supply.