Fannie Mae and Freddie Mac are reshaping condo project review, reserves, and insurance rules in 2026. Here's what's getting easier, what's getting stricter, and exactly what to request early so your condo deals don't stall.
Condo deals will hinge more than ever on HOA reserves, insurance deductibles, reserve studies, special assessments, project review type — and whether there's a master association. The agents who win in 2026 start asking for HOA (and master-association) documents early — ideally before a buyer is deep into contract.
Fannie Mae and Freddie Mac are changing how condo projects get approved for financing. Some changes make condo lending easier — especially for small projects and many Florida condos. Others make a financially weak HOA a much bigger obstacle than it used to be.
For you, the practical shift is simple: the condo association's financial and insurance health now drives whether your buyer can close. Knowing what to ask for — and spotting red flags before inspection and appraisal deadlines — is the difference between a smooth close and a dead deal.
This is the pre-screen question agents miss most — and it applies to both Fannie and Freddie. A small condo project is not automatically easy if it sits inside a larger community.
If a 5–10 unit condo project is part of a master, umbrella, recreation, or shared-amenities association — or a larger planned development — do not assume the easy small-project review path is available.
Waiver of Project Review reaches new & established projects with 10 or fewer units — but a 5–10 unit project can't use it if it's part of a master association or larger development.
Exempt from Review reaches 2–10 unit projects — but 5–10 unit projects in a Master Association generally need another path (Established/New Condo, Reciprocal, or Streamlined before its retirement).
Get these in hand as soon as a condo is in play — not after the inspection clock starts:
"Condo financing rules are changing. The lender will look closely at the HOA's reserves, insurance, deductible structure, special assessments, and any deferred maintenance. We need the condo documents early so we can identify problems before the buyer loses time, money, or inspection/appraisal deadlines."
"If this condo is part of a master community, the lender may need to review more than just the condo HOA — we may need master association documents too, and the deal may not qualify for the easier small-project review path. Let's get those documents early so we don't discover a financing issue after the buyer is already under contract."
The practical direction is similar, but the agencies use different terminology. You don't need to memorize it — just know why two lenders might describe the same issue differently.
| Change | Fannie Mae | Freddie Mac |
|---|---|---|
| Small-project relief (10 or fewer units) | Waiver of Project Review | Exempt from Review |
| Reduced review path going away | Retiring Limited Review | Retiring Streamlined Review |
| Florida attached condos | Retiring mandatory PERS submission for new/converted projects | Removing FL hurdles tied to Fannie CPM approval/status |
| Investor / occupancy | Retiring 50% investor concentration limit (established, Full Review, investor loans) | Retiring 50% owner-occupancy requirement (established projects, investment) |
| Insurance detail | Roof coverage & replacement-cost flexibility | Adds named-storm, per-occurrence deductible, deductible buy-back, e-evidence specifics |
Realtor action item is the same either way: get the master policy, deductible schedule, and HO-6 requirements early.
| Topic | Before | After | Effective |
|---|---|---|---|
| Small-project review relief | Narrower waiver/exempt paths | Fannie: waiver for ≤10 units. Freddie: exempt for 2–10 units | Mar 18, 2026 |
| 5–10 units in a master community | Easy to overlook | Generally can't use the small-project path if in a master association | Mar 18, 2026 |
| Florida new attached condos | Fannie required PERS | PERS retired; lender-delegated Full Review | Mar 18, 2026 |
| Investor / owner-occupancy caps | 50% investor (Fannie) / 50% owner-occ (Freddie) | Both retired for established projects on investor loans | Mar 18, 2026 |
| Limited / Streamlined Review | Reduced-review paths available | Retired — Full Review or waiver/exempt if eligible | Apps on/after Aug 3, 2026 |
| Reserve studies | Could support adequacy flexibly | Must use highest recommended allocation; no baseline funding | On/after Aug 3, 2026 |
| Replacement reserve minimum | 10% of budgeted assessments | Rises to 15% (Full Review) | On/after Jan 4, 2027 |
| Master policy per-unit deductible | More complex framework | Max $50,000/unit; HO-6 required when it applies | On/after Jul 1, 2026 |
Condensed for realtors. Fannie Mae and Freddie Mac wording differs — see the terminology table above. Confirm specifics per project with your lender.
Send me the condo project name, address, and whether it has a master association, and I'll help you spot the financing red flags early — reserves, insurance, review path, and master-HOA issues — so nobody loses time, money, or a deadline. I want to be the lender your condo deals can count on.