Freddie Mac Says Your Condo Is 'Not Eligible': What the Message Codes Mean and How an HOA Can Respond
When a lender checks a building against Freddie Mac's Condo Project Advisor tool and the answer comes back "Not Eligible," buyers and boards usually get a terse explanation, if they get one at all. Freddie Mac publishes the message codes behind those findings, and it has an appeal path that a board member or property manager can start directly. This article decodes both, and flags a change taking effect on October 25, 2026. For a broader tour of how the tool works, start with our guide to Freddie Mac's Condo Project Advisor.
The statuses a project can receive
Freddie Mac's FAQ lists six project assessment finding statuses: Project Certified, Seller Certified, Green, Yellow, Incomplete Assessment, and Not Eligible (Freddie Mac Condo Project Advisor FAQ). The two that matter most to a board are:
- Yellow: "The condo project does not comply with one or more of the requirements assessed."
- Not Eligible: "The condo project does not meet certain project review and general eligibility requirements." (Freddie Mac Condo Project Advisor FAQ)
The wording of the lender-facing message is stronger: "The Condominium Project is 'Not Eligible.' A Mortgage secured by a unit in this Condominium Project is not eligible for sale to Freddie Mac" (Freddie Mac Condo Project Advisor Feedback Messages, posted August 3, 2026). That is message code CPAX2000. Freddie Mac also describes the status as dynamic rather than permanent: the classifications "are dynamic based on the underlying eligibility drivers" (Freddie Mac Condo Project Advisor FAQ).
What the Not Eligible codes say
Freddie Mac's published feedback-message document lists these reasons. Each is quoted from the document, which also gives the Seller/Servicer Guide section for each one (Freddie Mac Condo Project Advisor Feedback Messages):
| Code | Message |
|---|---|
| CPAX2001 | "The Condominium Project is a Condominium Hotel or similar type of transient housing." |
| CPAX2002 | "The Condominium Project has excessive commercial or non-residential space." |
| CPAX2003 | "The Condominium Project is a timeshare project or a project that allows segmented ownership." |
| CPAX2004 | "The Condominium Project unit owners do not possess sole ownership of the Common Elements." |
| CPAX2005 | "The Condominium Project has pending litigation or ADR proceeding(s)." |
| CPAX2006 | "The Condominium Project has excessive single investor concentration." |
| CPAX2007 | "The Condominium Project has mandatory dues or similar membership fees." |
| CPAX2008 | "The Condominium Project needs Critical Repairs." |
| CPAX2009 | "The Condominium Project does not have property insurance that complies with applicable requirements." |
| CPAX2010 | "The Condominium Project is subject to termination, insolvency, or similar action." |
| CPAX2011 | "The Condominium Project's percentage of delinquent HOA assessments does not comply with Guide requirements." |
| CPAX2012 | "The Condominium Project's percentage of delinquent special assessments does not comply with Guide requirements." |
| CPAX2013 | "The Condominium Project has inadequate reserves." |
One caution from Freddie Mac's own FAQ: it says the tool "will assign a Not Eligible status when certain project review and general eligibility requirements have not been met," and it does not present a definitive list of every reason (Freddie Mac Condo Project Advisor FAQ). Treat the table as the published messages, not a guarantee that no other reason exists.
Boards that have worked through Fannie Mae's rules will recognize several of these. For comparison, see how Fannie Mae treats litigation and special assessments and its reserve standards. The two agencies publish separate rules, so a building can pass one review and fail the other.
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How an HOA can respond
Freddie Mac's FAQ describes an appeal path that does not require going through a lender: "Appeals can be submitted by Sellers or authorized third-party originators (TPOs), or authorized representatives of the homeowners association (HOA) by completing a Not Eligible Status Data Form" (Freddie Mac Condo Project Advisor FAQ).
Who counts as an HOA representative? The FAQ defines it as "either a member of its board of directors or its project property manager" (Freddie Mac Condo Project Advisor FAQ).
If the lender's tool does not show which requirement failed, the FAQ says Sellers and TPOs "can call Customer Service (800 FREDDIE) or submit a Not Eligible Status Data Form requesting the information," and that authorized HOA representatives "can also request information by completing the same form" (Freddie Mac Condo Project Advisor FAQ).
Waivers for a single loan
Separately, Freddie Mac lets Sellers request a unit-level waiver, called a Project Waiver Request or PWR, for projects that need special consideration. The FAQ lists these eligible categories:
- Delinquent assessments: "more than 15% of the total number of units are 60 or more days delinquent on HOA assessments"
- Excessive commercial or non-residential space
- Leased amenities, where unit owners do not possess sole ownership of the common elements
- Pending litigation, including ADR proceedings, "involving non-minor matters, etc."
- Reserves: "budgets with less than 10% allocated to replacement reserves"
- Single entity ownership, for example "for projects that have 21 or more units, a single entity that owns more than 25% of the units" (Freddie Mac Condo Project Advisor FAQ)
A waiver is not a status change for the building. The FAQ states that "a waiver exception is for a specific mortgage secured by a condominium unit within an established condo project" (Freddie Mac Condo Project Advisor FAQ). The FAQ also notes that Condo Project Advisor is free to use.
What changes on October 25, 2026
Freddie Mac's October 2026 Loan Product Advisor release notes, posted September 16, 2026, include an item titled "Condo Project Not Eligible Comments Message Updates," effective October 25, 2026. The notes say: "Revised messages will be dynamic and allow additional commentary from Freddie Mac with more details about the condo project's Not Eligible status. This change will help provide specific, actionable feedback about why the condo project did not meet Freddie Mac's requirements and reduce the need for follow-up inquiries between the Seller and Freddie Mac" (Freddie Mac October 2026 LPA Release Notes).
The release notes do not publish the new message text or any required seller action, so what the revised comments will look like in practice is not yet public.
What boards and buyers can do now
- Ask the lender for the exact message code, not just "the condo was denied." A code like CPAX2005 points directly at a fixable or documentable issue.
- If you are a board member or the property manager, use the Not Eligible Status Data Form. Freddie Mac says you can file it yourself.
- Match the code to a cure. Delinquency, reserves, litigation and critical repairs are conditions a board can often address or document.
- Ask whether the Fannie Mae path is open. The same building can be reviewed under different rules. Our guide to passing Fannie Mae Full Review covers that side.
- Expect more detailed comments after October 25, 2026, and check for them on any file that was previously marked Not Eligible.
Sources
- Freddie Mac. Condo Project Advisor FAQ. https://sf.freddiemac.com/faqs/condo-project-advisor-faq
- Freddie Mac. Condo Project Advisor Feedback Messages (August 2026, posted August 3, 2026). https://sf.freddiemac.com/docs/pdf/condo_project_advisor_feedback_messages.pdf
- Freddie Mac. October 2026 LPA Release Notes (posted September 16, 2026). https://sf.freddiemac.com/docs/pdf/lpa-october-2026-release-notes.pdf
Is your building ready for these rules?
Answer 12 plain-English questions and get a free readiness score against Fannie Mae's published standards — with the exact rule behind every point. No account needed.