Nearly 700 condominium complexes around California have been placed on a “mortgage blacklist” that has created a headache for owners looking to sell their properties and, in many cases, forced them to lower their asking price.

The list — first reported on by the — is maintained by Fannie Mae, a government-sponsored entity that doesn’t issue loans itself, but with its sister company Freddie Mac buys up nearly half of all home loans and bundles them to sell to investors.

Wall Street Journal

Inclusion on the blacklist can make it nearly impossible for buyers to get a conventional loan — the kind that Fannie buys and guarantees, which tend to be cheaper than other mortgages and require lower down payments.

Fannie’s list has been growing in recent years, as it looks to for properties that it considers to be underinsured, dilapidated, or lacking sufficient reserves.

protect itself from taking on mortgages

In January 2024, business screeched to a half for real estate agent Larry Spiteri when Fannie Mae blacklisted the majority of units in Rossmoor, an upscale retirement community of 6,700 homes south of downtown Walnut Creek in Contra Costa County.

“For a while there, we were in a panic — no one was lending,” said Spiteri, who specializes in the area. With no lenders offering qualified mortgages, the only people selling were those who could find a . With the buyer pool reduced, home values in the community fell temporarily, he said.

cash buyer