Fannie Mae, which had been restricting loans to buyers of condominiums in Florida, is now relaxing some of those standards.
The mortgage finance company said today it is reviewing hundreds of condo projects that currently don't qualify for its loans and will allow more to become eligible.
Buildings deemed "sufficiently stable" after the review will be given a special approval lasting up to 18 months. Lenders will be allowed to offer mortgages to homebuyers and sell those loans to Fannie Mae, which pools them into bonds and sells them to investors.
Under regulations enacted in March, Fannie Mae has been rejecting any mortgage for a condo buyer if more than 15 percent of a development's other owners are delinquent on their association fees. What's more, Fannie Mae will guarantee mortgages only in new or newly converted condo developments if 70 percent of the units are sold or under contract.
Critics said at the time that the rules could force some new developments into bankruptcy because the 70 percent requirement will be hard to reach if buyers can't get a loan.
Fannie Mae and sibling company Freddie Mac provide vital cash to the mortgage industry by purchasing home loans from lenders and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, or about half of all mortgages.
The two companies, facing mounting losses from mortgage defaults, were taken over by the government in September 2008 under the authority of a law Congress passed in summer of 2008.
So far the government has provided $60 billion to Fannie Mae and $51 billion to Freddie Mac, and the Treasury Department last month promised unlimited aid over the next three years.
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