Fannie Mae Condo Blacklist Hooplah

Alex Navarro 21 March, 2025

The Condo Insurance ‘Crisis’ Isn’t What You Think

Recently you may have seen headlines with doomsday predictions about the state of the condo market, blaming rising insurance costs for making units unsellable. The Wall Street Journal recently ran an article claiming that skyrocketing premiums are putting condo owners in an impossible position. But here’s the thing—this is classic clickbait marketing, and the reality in Massachusetts is far less dramatic than they make it seem.

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Yes, insurance costs have risen nationwide, and yes, some condo associations have faced higher premiums. But the idea that condos are now “unsellable” is exaggerated at best. The truth? A good lender can always find a way to navigate financing challenges, and informed buyers and sellers have plenty of options to work around any roadblocks if the property is outside of a flood zone and in good repair. The majority of the issues the article is referencing are in areas with severe fire or flood risks or simply properties that are in disrepair or are dangerously under-insured.

Oh and one more thing, it's not a secret blacklist - it's a public database!

The Insurance Picture in Massachusetts

Let’s start with the numbers. It’s true that homeowner’s insurance rates have gone up, with Massachusetts seeing increases in line with national trends. But these increases are not rendering condos uninsurable or unsellable. In fact, Massachusetts remains one of the most resilient real estate markets in the country, with condos in high demand, especially in Greater Boston towns like Malden, Medford, Melrose, Somerville, Cambridge and Arlington.

The biggest issue? Condo associations that haven’t adjusted their budgets to account for higher insurance costs. This is where proactive management comes in. If your condo association is handling things properly, there shouldn’t be major issues securing insurance or selling your unit when the time comes.

A Good Lender Can Always Find a Solution

One of the most misleading takeaways from the Wall Street Journal’s article is the idea that buyers are simply out of luck if a condo association faces insurance hurdles. That’s simply not true. A knowledgeable lender who specializes in condo financing will have multiple solutions at their disposal, whether that means working with different loan programs, securing private mortgage insurance, or finding alternative lenders. Obviously a buyer needs to consider future resale so while Fannie Mae's approval might not be a big deal for you, don't get stuck owning a property in a flood zone or that is crumbling!

Fannie Mae and Freddie Mac do have strict insurance requirements for condo associations, but even if an association doesn’t meet them, there are still financing options available. A buyer might need to put a little more down, or they might work with a portfolio lender who doesn’t follow the same strict guidelines. The key is working with a real estate agent and lender who understand how to navigate these situations instead of panicking at the first hurdle.

What Current Condo Owners Should Be Doing

Instead of worrying about a manufactured crisis, condo owners should be proactive in protecting their investment. Here’s what you should be focusing on:

Stay Involved in Your Condo Association: Many condo owners don’t pay attention to what’s happening with their association until there’s a problem. That’s a mistake. If you own a condo, you should be attending budget meetings, reviewing financial statements, and making sure your association is planning properly for rising costs, including insurance.
Make Sure Your Condo Is Properly Insured: Even if your association carries a master policy, you need to have the right personal insurance coverage. This includes an HO-6 policy, which covers your unit’s interior and personal belongings. Talk to an insurance professional to make sure you have adequate coverage, especially if your building’s policy has higher deductibles.
Encourage Smart Financial Planning: Condo associations that run into trouble with insurance typically have financial mismanagement at the root of the problem. If your association hasn’t reviewed its reserve funds or planned for increasing costs, it’s time to push for better oversight.

The Bottom Line: Massachusetts Condos Are Still a Strong Investment

The narrative that rising insurance premiums have made condos unsellable is sensationalized and misleading. In reality, the Massachusetts real estate market remains strong, and while insurance costs are a factor, they’re far from an insurmountable issue. The key takeaway? Work with the right professionals, stay informed about your condo association’s finances, and don’t buy into the fearmongering.

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Fannie Mae Condo Blacklist Hooplah

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Fannie Mae Condo Blacklist Hooplah

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