“Unavailable in CPM” for insurance reasons stops every conventional loan
“Unavailable in CPM” for insurance reasons stops every conventional loan
2026-09-10 · Hawaii · Compliance
There is one status a Hawaii condominium project can carry that no automated approval overrides. The Selling Guide language is unambiguous:1
“Loan Delivery will not accept loans in projects that have a status designation of ‘Unavailable in CPM’ for insurance reasons as of the note date, even if DU reflects the Approved by Fannie Mae message.”
CPM is Condo Project Manager, the lender-facing system that carries a project’s eligibility status. DU is the automated underwriting engine. An approval from the second does not cure a flag in the first.
The second sentence, which explains how buildings get flagged late
“Fannie Mae does not review insurance policies as part of the review process, including when the loan has received a CPM Approved by Fannie Mae message in DU.”
Verification is the lender’s job. Nothing about a project’s insurance is checked centrally, which means a building can sit in good standing until the first lender actually reads the master policy.
And the reporting duty that propagates it
If a lender learns of anything that could affect eligibility — the guide names “significant deferred maintenance” and “major litigation” — it must notify the CPM Management team no later than five business days after becoming aware.
That is the pipe through which one building’s disclosure becomes a project-wide status change.
What this means in practice for a Hawaii board
A candid answer on one lender questionnaire can reach every future buyer. That is not an argument for concealment — misrepresenting a project’s condition on a lender form is its own serious problem, and the board owes owners accuracy. It is an argument for knowing, before you answer, what the honest answer is and what it triggers.
In practice: a board that first learns its spalling repair programme is “significant deferred maintenance” from a questionnaire it has 48 hours to return learns it too late.
Nothing updates automatically when you fix it. Because Fannie does not review policies centrally, a board that closes its hurricane gap or completes a repipe has to get the corrected evidence into lenders’ and CPM’s hands proactively. A project does not un-flag itself because the underlying problem went away.
The consequence, in the regulator's own words
The Insurance Division states the mechanism plainly in its consumer guidance:
“Government-sponsored enterprises Fannie Mae and Freddie Mac require full building coverage… If there is less than 100% coverage, they will not purchase mortgages from primary lenders. Because primary lenders sell 70% of their mortgages to Fannie Mae and Freddie Mac, if units requiring a mortgage cannot be sold on the secondary market, the entire building may lose value as future sales may be limited to cash buyers.”2
That is the whole chain: an insurance gap becomes a lending status, a lending status becomes a cash-buyers-only market, and a cash-buyers-only market becomes a valuation problem for every owner in the building including the ones who never intended to sell.
What is not public
How many Hawaii projects currently carry an unavailable status. CPM and the Condo Status Finder are lender-facing tools and no state-by-state list is published. Reported figures have described Hawaii’s count of financing-ineligible projects falling sharply through 2025 and 2026 as hurricane coverage was restored, but those are reported figures, not a published register.
The practical consequence of that opacity: an association cannot check its own status directly. The route is to ask a lender or a mortgage broker who has CPM access, and it is worth doing before a resale fails rather than after.
The four questions a board faces today
- Does the master policy cover 100% of estimated replacement cost value? Not the insured value on the declarations page — the replacement cost, currently estimated.
- What is the deductible structure? Per occurrence at or under 5%, per unit at or under $50,000, and each peril’s deductible compliant on its own.
- What would we have to disclose as deferred maintenance if asked in writing today?
- Who holds the current insurance evidence, and can it be produced in a day?
What to watch
Whether any Hawaii mechanism emerges for an association to see or contest its own project status. Nothing in state law addresses it, and the 2026 bill that would have written mortgage-lending compliance into associations’ statutory duties died in committee — so for now the status is decided entirely outside the state’s legal framework, by a system the association cannot log into.
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