If you’re buying, selling, or refinancing a condo, the rules changed on August 3, 2026.
Fannie Mae and Freddie Mac retired the Limited Review and the Streamlined Review. What that means in practice: most established projects with 11 or more units now default to a Full Project Review. The lender has to look at the whole association, not just your unit.
This came out of Fannie Mae Lender Letter LL-2026-03, issued with Freddie Mac and FHFA. The direction of travel here started with Surfside — the June 24, 2021 collapse that killed 98 people — and the years of scrutiny on deferred maintenance and underfunded reserves that followed. The Community Associations Institute has estimated roughly 40% of associations are underfunded on reserves.
What the lender will now ask your HOA for.
- The current budget
- Reserve information and the reserve study
- Financial statements
- Fidelity and liability insurance
- Delinquency figures
- Meeting minutes
- An inspection completed within the last three years
The parts that got easier. The waiver/exempt threshold moved up: projects of 10 or fewer units can qualify, where it used to be four or fewer. Projects in the 5 to 10 unit range generally don’t need a master association. The investor and owner-occupancy caps came off. And the special LTV limits that applied to established Florida condos were removed.
The date to put on your calendar. On January 4, 2027, the reserve minimum rises from 10% to 15% of annual budgeted assessment income. Where a reserve study exists, the highest recommended allocation in it is required.
What I’d do about it.
Ask the review status before you write the offer. Not after. “Is this project warrantable, and what review does it need” is a question your agent can ask the listing side today.
Give the timeline room. Plan on more than 30 days. The delay is almost never you — it’s waiting on an association to produce documents.
Sellers and boards: gather the package early. A complete, current, lender-ready document set is a marketability asset now. Buyers whose lenders can’t get documents walk.
Investors: reassess. The occupancy caps coming off changes some scenarios that didn’t pencil before. If the property is a rental, a DSCR loan looks at the property’s rent rather than a rebuilt income story.
Questions I keep getting
Does every condo need a full review now?
No. Projects of 10 or fewer units may still qualify as waiver or exempt. Established projects of 11 or more generally default to Full Project Review.
When does the 15% reserve requirement start?
January 4, 2027.
Will this make closings take longer?
It can. The document gathering is the slow part, which is why asking early matters.
How do I know if a project is lender-ready?
Ask the association for the complete, current document package. Your lender makes the call, but a board that can hand that over quickly is a good sign.
Looking at a condo right now? Send me the address before you write. I’ll tell you what we’re dealing with.
Original on VOCE: voce.com/@michaelmcdermott/condo-financing-changed-new-2026-fannie-freddie-geylny
Source: Fannie Mae Lender Letter LL-2026-03 (with Freddie Mac and FHFA), effective August 3, 2026.