In a Fannie Mae Full Review, 20 of a condominium project's 120 units are at least 60 days past due on common expense assessments. What does this show about the assessment-delinquency requirement?
Correct Answer
D) The project exceeds the 15% limit because 20 of 120 units is about 16.7%
D. The project exceeds the 15% delinquency limit. 20 / 120 × 100 = approximately 16.67%. At 120 total units, 15% permits at most 18 units meeting the delinquency definition; 20 is two above that number. Scope and exceptions: Count units, not delinquent dollars or only occupied units. Exactly 15% does not exceed this limit. Special-assessment delinquency has a separate test, and passing one requirement does not establish overall project eligibility. Source: Full Review Eligibility Requirements — https://selling-guide.fanniemae.com/sel/b4-2.2-02/full-review-process
Why This Is the Correct Answer
D. The project exceeds the 15% delinquency limit. 20 / 120 × 100 = approximately 16.67%. At 120 total units, 15% permits at most 18 units meeting the delinquency definition; 20 is two above that number. Scope and exceptions: Count units, not delinquent dollars or only occupied units. Exactly 15% does not exceed this limit. Special-assessment delinquency has a separate test, and passing one requirement does not establish overall project eligibility.
Why the Other Options Are Wrong
Option A: The project meets the limit because fewer than 20% of units are delinquent
Twenty percent is not the applicable limit.
Option B: The project meets the limit because only balances at least 90 days late count
The test begins at 60 days, not 90.
Option C: The project exceeds the limit because the maximum is 10% of units
The failure conclusion is right but the stated 10% limit is wrong.
Exam Tip
Match the numerator, denominator and delinquency age to the specific project test.
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