Denied a mortgage to buy a condo?

A secret, quasi-government blacklist may be why

Some people trying to buy a condominium in South Florida but getting mysteriously rejected for a mortgage could be in for a jolt: The reason they can’t get a loan may be that the condo is on a secret quasigovernmental blacklist.

News media reports and data leaks to a pair of law firms in New England and Fort Lauderdale have now confirmed what some in the condo industry suspected: that Fannie Mae, one of two federally chartered companies that help determine who qualifies for home mortgages, has for at least two years maintained a confidential database of condo buildings, including hundreds in Florida, that it won’t back for loans, typically because of maintenance or financial issues.

Inclusion in the database can make it next to impossible for owners and associations to get a traditional conforming mortgage, to refinance or to obtain loans for repairs at normal rates or terms, experts in the field say. Because Fannie Mae has insisted on confidentiality from lenders, the rejected applicants usually can’t find out why they have been denied.

The blacklist appears to have grown substantially since Fannie Mae enacted stricter requirements for condos to qualify for loans and mortgages that it backs a year after the Champlain Towers South collapse in Surfside in 2021, as associations across Florida and the rest of the country struggle to catch up with delayed maintenance and develop plans to address needed critical repairs.

The two law firms that have obtained the secret database say they will make it possible for condo owners and board members to find out if their buildings are on it, and why. They have created a website (CondoBlacklist.com) where verified owners and property managers can ask the firms to check if their condo is blacklisted, and, if they choose, get help from attorneys in finding out the reason. One firm, Allcock Marcus, which has offices in Boston and also