What Is a Project Waiver Request
A Project Waiver Request lets you get Fannie Mae financing for a condo unit even when the building doesn't meet all of Fannie Mae's standard project requirements. Think of it as an exception process for otherwise good buildings that have one or two problematic issues.
Say you want to buy a unit in a 10-year-old building where 40% of the units are owned by investors. Normally, Fannie Mae limits investor concentration to 25% for established projects. With a PWR, your lender can request an exception for your specific loan.
The waiver doesn't fix the building's issues. It simply allows Fannie Mae to purchase your individual loan despite the project's problems.
Which Projects Qualify for Waivers
Your condo project must be established, meaning at least 90% of units have been sold and the building has been operating for some time. New construction and conversion projects don't qualify for PWRs.
There's one exception to the 75% owner-occupant requirement for established projects. If the developer kept more than 25% of units as rentals and has owned them for at least 10 years, the project can still qualify for a waiver request.
The building must meet all other established project requirements from [[5701.5]] except for seven specific problem areas that PWRs can address.
What Issues Can Be Waived
PWRs can override these seven common condo project problems:
- High delinquent assessment rates above Fannie Mae's limits
- Excessive commercial space (more than 25% of total building area)
- Leased amenities where unit owners don't own common areas outright
- Pending litigation or alternative dispute resolution proceedings
- Low owner-occupancy rates below required thresholds
- Insufficient reserves for capital expenditures and maintenance
- High single investor concentration above 25% ownership
Your lender submits the waiver request through Fannie Mae's Condo Project Advisor system. The system evaluates the specific issues and determines whether the risk is acceptable for your individual loan.
How the Waiver Process Works
Your lender can submit a PWR at any point during your loan process, but it must happen before they sell your loan to Fannie Mae. Most lenders submit the request during underwriting once they've identified project issues.
The lender enters your loan's unique identifier into the Condo Project Advisor system. This could be your Loan Product Advisor key, Desktop Underwriter case ID, or the Doc File ID from your appraisal submission to Fannie Mae's collateral portal.
If approved, Fannie Mae issues a Condo Project Advisor Feedback Certificate specifically for your loan. This certificate doesn't apply to other buyers in the same building - each loan needs its own approved waiver.
Required Documentation
Your lender must keep the Condo Project Advisor Feedback Certificate in your loan file. This document proves Fannie Mae approved the waiver for your specific loan and protects the lender from having to repurchase your loan later due to the project issues covered by the waiver.
The certificate identifies exactly which project requirements were waived for your loan. Your lender remains responsible for verifying that your loan meets all other Fannie Mae requirements not covered by the waiver.
Timing Requirements and Delivery Rules
Once your loan closes, your lender has 120 days to deliver it to Fannie Mae. This is shorter than the typical delivery timeframe for standard condo loans.
If your lender misses the 120-day deadline, they must submit a completely new PWR and get a fresh Condo Project Advisor Feedback Certificate before delivering your loan. The original waiver expires and becomes invalid.
This tight timeline means your lender needs to move quickly after closing. Delays in loan delivery could force them to restart the entire waiver process.
Why Fannie Mae Offers This Exception Process
Fannie Mae created PWRs because many otherwise sound condo buildings fail their standard project requirements for technical reasons. A building might have excellent financials and management but exceed the investor concentration limit due to market conditions.
The waiver process lets Fannie Mae evaluate each situation individually rather than applying blanket rejections. This increases financing options for buyers while still maintaining risk controls.
The system also protects lenders from future repurchase demands related to the specific issues covered by the waiver. Without this protection, lenders would be reluctant to make loans in projects with known deficiencies.
Common Complications and Gotchas
The biggest surprise for buyers is learning that an approved waiver only covers their specific loan. If you're buying in a building where another buyer recently got a PWR approved, you still need your own separate waiver request.
Some buyers assume that getting a waiver means the building's problems are solved. The waiver simply allows your loan to proceed despite ongoing issues. If you're concerned about high investor concentration or pending litigation, those problems will still exist after you close.
Lenders sometimes wait too long to submit PWR requests. If they discover project issues late in the process, the waiver review could delay your closing. Smart lenders run preliminary project reviews early to identify potential waiver needs.
The 120-day delivery requirement catches some lenders off guard, especially if they're used to longer delivery windows for other loan types. Missing this deadline means starting over with a new waiver request.
References
For the official guidelines, see 5701.11: Condo Project Advisor® – Project Waiver Request (PWR) in the Fannie Mae Selling Guide.
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Original Freddie Mac Guideline Text
®
(CPA
℠
) allows authorized Sellers to submit a request for project waiver requests (referred to as a Project Waiver Request (PWR)) for Established Condominium Projects that do not meet certain Condominium Project eligibility requirements. Approved PWRs are issued a Condo Project Advisor Feedback Certificate.
This section contains requirements related to:
General eligibility
Documentation requirements for Mortgages with approved PWRs
(a)
(i)
Established Condominium Project
To be eligible for a PWR, the Condominium Unit Mortgage must be secured by a Condominium Unit in an Established Condominium Project.
However, a Condominium Project that meets all other requirements for an Established Condominium Project, other than the 75% percentage conveyance to unit purchasers, may still be considered as an Established Condominium Project on a case-by-case basis if:
The developer retained more than 25% of the units for rental purposes; and
The developer has owned these units for a minimum of 10 years
(ii)
Project eligibility categories
The Condominium Project must comply with the project eligibility requirements for Established Condominium Projects detailed in
Section 5701.5
and all other applicable requirements in
Chapter 5701
, except for the following Condominium Project eligibility categories:
Section 5701.3(d)
Project in which the unit owners do not possess sole ownership of the Common Elements (referred to as “Leased Amenities” in CPA) –
Section 5701.3(h)
Pending litigation (includes Alternative Dispute Resolution (ADR) proceedings) –
Section 5701.3(i)
Owner occupancy (referred to as “Project Unit Occupancy” in CPA) –
Section 5701.5(b)
Reserves for capital expenditures and deferred maintenance –
Section 5701.5(c)
Excessive single investor concentration (referred to as “Single Entity Ownership” in CPA) –
(iii)
Submission timing
The PWR may be submitted at any time during the loan origination process but must be submitted prior to sale of the related Condominium Unit Mortgage to Freddie Mac.
(iv)
Mortgage identification
An approved PWR is applicable to only the Mortgage identified on the Condo Project Advisor Feedback Certificate and is not applicable to any other Mortgage secured by a Condominium Unit located in the same Condominium Project. The Mortgage identified will be the Mortgage in connection with which the Seller enters one of the following in the “Enter ID/Key” field in CPA:
The Loan Product Advisor key alphanumeric identifier
®
key alphanumeric identifier (referred to as Casefile ID in Desktop Underwriter), or
The Doc File ID alphanumeric identifier issued in connection with submission of the appraisal data to the Uniform Collateral Data Portal
®
(b)
Documentation requirements for Mortgages with approved PWRs
The Condo Project Advisor Feedback Certificate must be maintained in the applicable Mortgage file.
(c)
Representations and warranties
In connection with a Mortgage with an approved PWR, Freddie Mac will accept the Condo Project Advisor Feedback Certificate and will not exercise its remedies, including the issuance of repurchase requests, in connection with a breach of the Seller’s selling representations and warranties related to the Condominium Project review and eligibility requirements identified on the Condo Project Advisor Feedback Certificate.
The Seller remains responsible for compliance with all other requirements of their Purchase Documents.
(d)
Delivery requirements
Condominium Unit Mortgages with approved PWRs must be delivered to Freddie Mac within 120 days after the Note Date.
If the Condominium Unit Mortgage is not delivered within 120 days after the Note Date, the Seller must submit a new PWR and obtain a new Condo Project Advisor Feedback Certificate prior to delivery.
