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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 116816
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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My condo in Florida did not close last week because the HOA

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My condo in Florida did not close last week because the HOA opted not to carry Ordinance & Law insurance. I never heard of it nor was advised that it could cost me the sale of my condo.

Is it true that ALL lenders backed by Fannie Mae/Freddie Mac required Ordinance & Law? If so, what percentage of home buyers in 2013 use banks that are backed by Fannie Mae/Freddie Mac?
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

Fannie Mae and Freddie and the other government backed lender programs can and do request various types of coverage on HOA and Condo Associations and also can demand that the association have prohibitions against renting out more than a small percentage of the units. There is no information available on "percentage of home buyers" I am afraid, but you can use a conventional mortgage which would allow you to avoid the restrictions on insurance that are imposed by the government backed loans.

The federally backed loans all have numerous restrictions not imposed by conventional mortgages and many of them are onerous and will not be waived, even though there is no law that the association must have Ordinance and Law insurance in FL (the requirement is not a law, it is just a requirement on the borrower imposed by the government backed lender, which they have a right to do).

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