The Federal 'blacklist' making it impossible to sell California condos
A federal mortgage blacklist is making it nearly impossible to buy and sell condos in California.
The list is compiled by Fannie Mae, who back around fifty percent of America's mortgages by buying the loans from lenders and selling them on in packages to investors.
If a building crops up on the government-sponsored underwriters' list it can be hard for a potential buyer to get a Fannie Mae-backed mortgage to purchase a condo there.
In turn, existing owners end up stuck with unsellable properties.
California currently has the second most of any start after Florida, which has a staggering 1,438 blacklisted buildings, according to law firm Allcock & Marcus who have access to the list.
As of March 2025 California has 733 'blacklisted' properties, up from 174 in May 2023, according to the firm's latest data shared with DailyMail.com.
Buildings can end up on the list due to insufficient insurance coverage, structural problems or overdue maintenance issues.
It is not yet known exactly which buildings are on the blacklist, but Mercury News reported that 168 Bay Area properties are affected, including 21 in San Francisco.
California currently has more than 700 condominium complexes on the secret blacklist
The secret list has been around since 2005 but was kept under wraps until its rapid expansion following the Surfside Condo collapse in 2021.
The tragedy exposed widespread issues with underinsured buildings and overdue repairs — not just in Florida, but across the US.
However, a home insurance crisis across the country is also making it harder for buildings to access affordable and adequate insurance.
California in particular has seen insurance companies pull cover and hike premiums as wildfires and other climate-related disasters increase their risks.
Condo associations are trying to limit costs by agreeing to pared down insurance policies that then make their condos ineligible for Fannie Mae and Freddie Mac-backed mortgages.
A spokesperson for Fannie Mae said its requirements are designed to 'help protect borrowers from physically unsafe or financially unstable projects.'
Freddie Mac said it does not keep a list of developments that don't meet its criteria.
The sheer increase of buildings being blacklisted, now more than 5,000, led Allcock & Marcus to send Freedom of Information Act requests to the Federal Housing Finance Agency.
As of March 2025 California has 733 'blacklisted' properties, up from 174 in May 2023
Florida currently has 1,400 buildings blacklisted, more than any other state
Fannie Mae buys around half of American home loans from lenders and sell them to investors
The Surfside Condo collapse in Sothern Florida in 2021 killed 98 people
After initial 'stonewalling' Fannie Mae made the list available to the firm in March 2025.
'In this past two years 3,401 Condominiums have been added to the list, a 191.714 percent increase!' Jake Marcus, managing partner at Allcock & Marcus’s Florida office told DailyMail.com.
'The blacklist has real-world consequences for homeowners, lenders, and the broader real estate market.'
'Homeowners are finding themselves trapped in unsellable properties, while potential buyers face financing roadblocks.'
