What PERS Means for Your Home Purchase
When you want to buy a condo, co-op, or home in a planned unit development (PUD), your lender needs to verify that Fannie Mae will purchase your loan. PERS — the Project Eligibility Review Service — is one way lenders get that approval.
Think of PERS as Fannie Mae's quality control system for residential projects. Before they'll buy your mortgage, they want to make sure the building or development meets their standards for construction quality, financial stability, and legal compliance.
Say you're buying a unit in a 50-unit condo building that was converted from apartments two years ago. Your lender will likely need to submit this project to PERS because newly converted buildings require extra scrutiny. Fannie Mae wants to verify the conversion was done properly and the homeowners association has adequate reserves.
The process affects your timeline. Your lender cannot close your loan until the project receives Final Project Approval. This can add weeks to your purchase if the project hasn't been reviewed before.
Which Projects Must Use PERS
Certain types of projects have no choice — they must go through PERS review. These include newly converted condos and co-ops, projects with manufactured homes, and developments that don't meet the criteria for other approval methods.
For established projects that have been operating successfully for years, PERS is often optional. Your lender might choose PERS because it can be faster than other approval methods, especially for projects that have been approved before.
The key distinction is between "new" and "established" projects. A condo building that was just converted from rental apartments is new. A 10-year-old condo development with a stable homeowners association is established.
The Standard PERS Process
The standard PERS process involves multiple steps and can take several weeks. Your lender starts by reviewing the project against Fannie Mae's requirements before submitting anything.
The lender then assembles a comprehensive package of documents and submits it to Fannie Mae's Project Standards team. This isn't a simple online form — it requires detailed financial statements, legal documents, engineering reports, and multiple Fannie Mae forms.
Fannie Mae reviews everything and issues one of four decisions: Conditional Project Approval, Final Project Approval, Ineligible, or Suspension. Only Final Project Approval allows your loan to close.
If the project receives Conditional Project Approval, additional requirements must be met before it becomes final. This might involve the homeowners association increasing reserves or completing certain repairs.
Required Documentation for PERS
The standard PERS submission requires numerous Fannie Mae forms, each serving a specific purpose. Form 1029 covers the project questionnaire, while Form 1030 handles the legal review checklist.
Financial forms include Form 1051 for the project's budget and financial statements. Form 1054 covers the homeowners association or co-op corporation analysis. Engineering and inspection reports use Forms 1071 and 1073.
The lender must also provide the project's governing documents — the declaration, bylaws, and any amendments. For condos, this includes the master deed and all recorded documents that establish the condominium.
Recent financial statements from the homeowners association are critical. Fannie Mae wants to see that the association collects adequate fees and maintains proper reserves for major repairs and replacements.
Special Rules for Converted Buildings
Newly converted condo and co-op projects face stricter requirements. These buildings were previously rental properties or other uses, so Fannie Mae wants extra assurance about their condition and financial stability.
The conversion work must be completed professionally, and an engineer's report must confirm the building's structural integrity. This isn't just a basic inspection — it needs to address the remaining useful life of major building components like roofs, HVAC systems, and elevators.
A current reserve study is mandatory. This professional analysis estimates when major building components will need replacement and how much money the association should save. The association must actually have these funds in reserve, not just a plan to collect them later.
At least 50% of the units must be sold to owner-occupants or second-home buyers. This prevents developers from converting buildings and immediately selling most units to investors, which can create financial instability.
Streamlined Process for Established Projects
Established projects that have been operating successfully can use a faster streamlined process. This requires fewer forms and less documentation because the project has a proven track record.
The streamlined process still requires basic financial information and legal documents, but skips some of the detailed engineering and market analysis required for new projects. Your lender submits Forms 1029, 1030, and 1051, along with current financial statements.
Even with the streamlined process, Fannie Mae can request additional documentation if they identify concerns during their review. A project that looks straightforward might still need the full standard review if issues emerge.
Understanding Approval Types and Timelines
Conditional Project Approval means the project meets most requirements but has specific conditions that must be satisfied. This approval expires in 9 months, creating pressure to resolve any outstanding issues quickly.
Final Project Approval is what you need to close your loan. This approval lasts 18 months, giving you and other buyers time to complete purchases without rushing the project through review again.
If a project receives an Ineligible designation, no Fannie Mae loans can be made there. Your lender would need to find a different investor for your loan or you'd need to look elsewhere for financing.
Suspension means Fannie Mae needs more information or has identified issues that must be resolved before they can make a decision. This can significantly delay your closing timeline.
Common Problems That Delay Approval
Inadequate reserves cause many project rejections or conditions. Fannie Mae wants to see that the homeowners association has enough money saved for major repairs and replacements. A building with a 20-year-old roof but no reserves for replacement will face scrutiny.
Legal document problems can derail approvals. Condo declarations and bylaws must meet specific Fannie Mae requirements. Documents that give developers too much control or don't properly establish unit boundaries create issues.
High investor concentration is another common problem. If too many units are owned by investors rather than residents, Fannie Mae may reject the project or impose conditions. They want to see stable, owner-occupied communities.
Incomplete financial information delays many submissions. Missing budget details, unclear reserve fund accounting, or outdated financial statements force Fannie Mae to request additional documentation, extending the review timeline.
What This Means for Your Purchase Timeline
If you're buying in a project that needs PERS review, build extra time into your purchase timeline. The review process typically takes 4 to 8 weeks, depending on the complexity and completeness of the submission.
Projects that have been approved before often move faster, especially if they're using the streamlined process. But first-time submissions or projects with complications can take much longer.
Your purchase contract should include contingencies that protect you if the project doesn't receive approval. Without Final Project Approval, your lender cannot close a Fannie Mae loan, potentially forcing you to find alternative financing or cancel the purchase.
Stay in communication with your lender about the PERS status. They should be able to tell you when the submission was made and provide updates on the review progress. Don't assume everything is proceeding smoothly without confirmation.
References
For the official guidelines, see B4-2.2-06: Project Eligibility Review Service (PERS) in the Fannie Mae Selling Guide.
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Original Fannie Mae Guideline Text
B4-2.2-06, Project Eligibility Review Service (PERS) (06/04/2025)
Standard PERS Submission Process
Required Forms for Standard PERS Submission
Additional Requirements—For Newly Converted Non-Gut Rehabilitation Condo or Co-op Projects
Additional Requirements - For Condo and PUD Projects Comprised of Manufactured Homes
Streamlined PERS Submission Process—For Established Projects
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.
Required for:
Optional for:
Required for:
Optional for:
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
The standard PERS submission process is described below:
Action
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
The lender completes a project submission package, that includes:
See below for additional forms that may be required.
The condo project's legal documents must comply with the Fannie Mae's requirements listed in
.
The lender submits the complete project package, including all relevant supporting documentation, via email using the PERS Project Submission mailbox. See
.
A member of the Project Standards team reviews the package to determine if the project is eligible for approval.
Upon completion of the review, Fannie Mae issues its decision to the lender via email and posts approved projects on its website. See
Project Eligibility Review Service (PERS) Overviewon Fannie Mae's website.
Required Forms for Standard PERS Submission
The forms shown below are required for a standard PERS submission.
Description
1029103010511054107110731073A107810791081
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
.
For condo projects—The condo project must comply with all requirements of the Full Review (as provided in
and ).
For co-op projects—The co-op project must comply with all requirements for co-op projects (as provided in
, and ).
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
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.
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
.
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
.
Perform a thorough underwriting analysis of the project and provide the conclusion of such analysis.
Streamlined PERS Submission Process—For Established Projects
The streamlined PERS submission process for established condo projects is as follows:
Action
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.
The lender completes a project submission package, which includes:
The lender submits the complete project package, including all relevant supporting documentation, via email using the PERS Project Submission mailbox. See
.
A member of the Project Standards team reviews the package to determine if the project is eligible for approval.
Upon completion of the review, Fannie Mae issues its decision to the lender via email and posts approved projects on its website. See
Project Eligibility Review Service (PERS) Overviewon 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
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
.
