Fannie Mae & Freddie Mac's 2026 Condo Rule Changes: What It Means for Buyers and HOAs

In March 2026, Fannie Mae and Freddie Mac released coordinated updates to their condo project review guidelines — changes that affect essentially every conventional condo loan in the country, whether or not your association has ever dealt with either agency directly.

What actually changed

The updates touch three areas: how condo projects get reviewed for loan eligibility, how much associations are required to hold in reserves, and what insurance standards apply to a project before a loan can close.

• Reserve minimums are rising from 10% of the annual budget to 15%, with associations expected to reach that level by January 2027 or risk buyers in the building facing loan denials.
• "Limited Review" is being phased out. This was a lighter-touch review process some lenders used for established, low-risk condo projects — its elimination means more condo purchases will face full underwriting scrutiny.
• Reserve study funding rules are tightening. As of August 2026, associations that already have a reserve study on file are expected to fund reserves to the study's highest recommended level, rather than a bare-minimum baseline.

Why this matters if you're buying or already own

If you're shopping for a condo, expect lenders to ask harder questions about the building's reserve funding and insurance coverage than they might have a few years ago — and expect that to take longer. If you already own in a building that's under-reserved, this is part of why special assessments and dues increases have become more common industry-wide: boards are catching up to new funding expectations rather than waiting for a crisis to force the issue.

This is a fast-moving area — agency guidelines get refined further as lenders adapt, so confirm current requirements with your loan officer rather than relying on any single point-in-time summary, including this one.

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