What Project Review Waiver Means for Your Loan
When you're buying a condo or a home in a planned unit development (PUD), your lender typically has to review the entire project to make sure it meets Fannie Mae's standards. This review can add weeks to your closing timeline and sometimes kills deals if the project doesn't qualify.
The project review waiver eliminates this step for certain property types and loan scenarios. Your lender can approve your loan based on your personal qualifications and the individual property, without waiting for a complex project analysis.
Say you're buying a detached condo unit in a development of 20 similar homes. Even though it's technically a condo, Fannie Mae treats it like a single-family home for project review purposes. Your lender can move straight to underwriting your loan without analyzing the homeowners association's budget, insurance coverage, or owner-occupancy ratios.
Properties That Qualify for Waived Review
Detached condos get automatic waivers regardless of project size or age. A detached condo shares no walls, floors, ceilings, or attached structures like garages or breezeways with neighboring units. This includes site condos where you own both the unit and the land underneath it.
Small condo projects with four units or fewer also qualify. Whether the project is brand new or established doesn't matter. Your lender can approve a loan for unit 3 in a four-unit condo building without reviewing the project's finances or governance.
Most PUD projects qualify for waivers too. PUDs are developments where you own your individual lot and home but share common areas through a homeowners association. The main exception is PUD projects with manufactured homes that have special ownership arrangements like community land trusts or ground leases.
Special Rules for Refinance Loans
Fannie Mae to Fannie Mae limited cash-out refinances get project review waivers for condo units when the new loan-to-value ratio stays at 80% or below. This only applies if Fannie Mae already owns your current mortgage.
High LTV refinance loans automatically qualify for project review waivers regardless of the current loan owner. These loans help borrowers refinance when they owe more than 80% of their home's current value. The waiver applies to condos, co-ops, and PUD projects.
If you're refinancing your condo through the high LTV program, your lender won't need to verify that your building has adequate reserves or review the association's insurance coverage. The focus stays on your ability to repay the new loan.
Requirements That Still Apply
Getting a project review waiver doesn't eliminate all property requirements. Your lender must still verify the property meets basic eligibility standards under Fannie Mae guidelines [[B2-3]].
The project cannot appear as "Unavailable" in Fannie Mae's Condo Project Manager system. Your lender will check this database during the loan process. Projects get marked unavailable for issues like inadequate insurance or financial problems.
Certain project types remain completely ineligible regardless of waiver status. These include condo hotels, houseboat projects, timeshares, and any project with evacuation orders or critical unaddressed repairs.
The homeowners association's common expense assessments must still take priority over your mortgage in case of foreclosure. This protects the association's ability to collect dues and maintain the property.
Documentation Your Lender Still Needs
Your lender must obtain a full appraisal that meets all standard requirements. The appraiser will note the project type and confirm the property qualifies for the waiver, but won't need to analyze project-level details like reserve funds or owner-occupancy ratios.
Insurance requirements remain in full effect. For condos, this means verifying both the master policy covering common areas and your individual unit coverage. PUD properties need standard homeowners insurance covering the entire property.
Your lender will document the specific waiver category in the loan file. For a detached condo, they'll note that the unit shares no attached elements with neighboring units. For small projects, they'll confirm the total unit count.
Why Fannie Mae Offers These Waivers
Detached condos function like single-family homes from a risk perspective. Since the units don't share structural elements, problems with neighboring units or common areas pose less risk to your property's value and marketability.
Small condo projects with four units or fewer operate more like small apartment buildings than large developments. The homeowners association dynamics are simpler, and financial problems are easier to spot and resolve.
For refinances, Fannie Mae already has experience with the property and project. If they were comfortable lending on it before, the risk profile hasn't changed significantly just because you're refinancing.
Common Issues That Can Still Derail Your Loan
Even with a project review waiver, your loan can get denied if the property falls into an ineligible category. Manufactured homes in PUD projects with special ownership structures don't qualify for waivers and require full project review.
Projects undergoing termination or involved in bankruptcy proceedings remain ineligible. Your lender will discover this during basic property research, even without a full project review.
If your property is in a high-rise building or shares significant structural elements with neighboring units, it won't qualify as a detached condo. The appraiser will identify this issue and your lender will need to conduct a full project review.
Insurance gaps can still kill your loan. If the master policy has expired or doesn't provide adequate coverage, your lender must resolve this before closing, waiver or no waiver.
References
For the official guidelines, see B4-2.1-02: Waiver of Project Review in the Fannie Mae Selling Guide.
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Original Fannie Mae Guideline Text
B4-2.1-02, Waiver of Project Review (07/02/2025)
Transactions Eligible for a Waiver of Project Review
Requirements that Apply When the Project Review is Waived
Project Review Requirements for High LTV Refinance Loans
Transactions Eligible for a Waiver of Project Review
Fannie Mae does not require a thorough project review for the project types and transactions described in the following table.
Detached condo unit
A detached condo is defined as any condo unit that is completely detached from other condo units in the project. The unit may share no adjoining walls, ceilings, floors, or other attached architectural elements (such as breezeways or garages) with any neighboring unit. A detached condo unit may be in a project consisting solely of detached units or in a development containing a mixture of attached and detached units. Site condos in which the unit owner owns the detached condo unit and the land upon which the unit is built are a type of detached condo. The waiver of project review applies for new and established projects.
Unit in a two- to four-unit condo project
Project review is waived for new and established condo projects that consist of no more than four units.
Unit in a PUD project
Project review is waived for units in new and established PUD projects, except for PUD projects consisting of manufactured homes subject to a community land trust, deed restriction, ground lease, or shared equity arrangement.
See
Fannie Mae to Fannie Mae limited cash-out refinance
Project review is waived for units in condo projects for Fannie Mae-owned loans that are refinanced as a limited cash-out refinance with a maximum loan-to-value ratio of 80% (CLTV or HCLTV ratios may be higher). (The waiver is not applicable to units in co-op projects.)
Exception to the waiver policy: Other than the PUD requirements above, if the property is a manufactured home or the project contains any manufactured homes, such property or project is not eligible for a review waiver and must be reviewed based on the applicable manufactured home project review requirement.
Requirements that Apply When the Project Review is Waived
The following requirements apply, in addition to those noted above, when a project review is waived:
property eligibility requirements (described in Chapter B2-3, Property Eligibility);
the project is not in Condo Project Manager (CPM) with a status of "Unavailable";
the project is not a condo hotel or motel, houseboat project, or a timeshare or segmented ownership project (described in B4-2.1-03, Ineligible Projects);
priority of common expense assessments (described in B4-2.1-01, General Information on Project Standards);
when an appraisal of the property is obtained, it must meet all applicable appraisal requirements (described in Chapter B4-1, Appraisal Requirements);
insurance requirements (described in Subpart B7, Insurance, as applicable);
there are no unaddressed critical repairs outstanding or projects with evacuation orders (described in B4-2.1-03, Ineligible Projects) if the loan is a Fannie Mae to Fannie Mae limited cash-out refinance; and
the project is not terminating and is not involved in insolvency proceedings (described in B4-2.1-03, Ineligible Projects).
Project Review Requirements for High LTV Refinance Loans
Fannie Mae waives the project review requirements for high LTV refinance loans secured by units in a condo, co-op, or PUD project. See B5-7-01, High LTV Refinance Loan and Borrower Eligibility for the requirements.
