Condo financing rules to change in 2026
Fannie Mae and Freddie Mac are updating condo project review, reserve and insurance standards, with several changes taking effect in 2026 and 2027.
Condo financing rules are changing under new updates that affect how lenders review condo projects, how much money associations keep in reserves and what insurance coverage is needed.
The changes, from Fannie Mae and Freddie Mac, include insurance flexibility that has already drawn attention, including updates related to roof coverage. But the broader policy revisions also change how some condo projects are reviewed for financing, an issue that may be especially relevant in Florida’s condo-heavy markets.
In Florida, Fannie Mae is ending its requirement that new or newly converted condo projects with attached units go through its Project Eligibility Review Service. Those projects may now be reviewed through the lender-delegated Full Review process.
For real estate professionals, the changes underscore the need to flag condo documents, budgets, insurance coverage and project eligibility early. Buyers may face more questions about a building’s reserves and insurance, while sellers and associations may need clear documentation to avoid financing delays.
Fannie Mae is retiring its Limited Review process, while Freddie Mac is retiring its Streamlined Review process. Those options generally allowed certain established condo projects to go through a less extensive review. For loan applications dated on or after Aug. 3, 2026, those projects generally must go through a Full Review, unless they qualify for a waiver.
A Full Review requires lenders to take a closer look at the condo project itself, not just the buyer. That can include the association’s budget, reserves, insurance, project eligibility, financial condition and whether the property meets agency standards. Fannie Mae also is expanding its Waiver of Project Review to include new and established projects with 10 or fewer units, which may help some smaller associations avoid a full project review if they meet the agency’s conditions.
The reserve change may be especially important in Florida. For applicable condo loans, replacement reserve funding expectations will increase from 10% to 15% of annual budgeted income beginning in January 2027. That means condo budgets, reserve studies, insurance coverage and project eligibility could draw more scrutiny during financing.
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