If you're buying, selling, or working with condos, there are some important rule changes you should know about. In March 2026, Fannie Mae and Freddie Mac updated the standards lenders have to follow when financing condo properties. Some changes make things easier. Others add new requirements that could affect your timeline or costs.

Why Did the Rules Change?

After the 2021 collapse of a condo building in Surfside, Florida, lenders were required to do much more thorough checks on condo buildings before approving loans. Those changes helped protect buyers, but they also made it harder to finance a lot of perfectly good condo properties.

The new 2026 updates try to strike a better balance, easing up in some areas while tightening others.

What's Getting Easier?

Some of the updates reduce costs and cut through red tape. Here's where things got simpler:

• Small buildings may skip the full review. Condo projects with 10 or fewer units can now qualify to bypass the project review process entirely. This is a big deal for buyers in smaller buildings, as it can significantly speed up loan approval.
• Roof insurance requirements are more flexible. Buildings no longer have to insure their roofs at full replacement cost. Instead, certain roof losses like wind or hail damage can now be covered based on the roof's current depreciated value. This typically means lower insurance premiums for the building, which can reduce costs for the HOA and unit owners.
• Deductible rules are clearer. Master insurance policies can now include per-unit deductibles up to $50,000. If your building has a deductible like this, you as a unit owner would need your own individual condo insurance policy (called an H06) to cover that gap. More on that below.
• Florida condo financing got a little easier. New condo projects in Florida no longer have to go through a special Fannie Mae approval process. Lenders can now handle the review themselves, which removes a layer of complexity for buyers in that market.
• Investor concentration limits are gone for established buildings. Previously, buildings where more than 50% of units were owned by investors had trouble qualifying for conventional financing. That cap has been removed for established projects, which opens up more buildings to buyer financing.

What's Getting Stricter?

On the other side, some requirements are getting tougher, especially for larger or more complex buildings:

• The streamlined review option is going away. Starting August 3, 2026, most condo projects will require a full lender review rather than the simplified process many transactions have relied on. That means more documentation, more scrutiny of HOA finances, and potentially longer approval timelines.
• HOAs will need to save more money. Starting January 2027, condo associations will be required to set aside at least 15% of their annual budget for repairs and maintenance, up from 10%. If a building's HOA is underfunded, this could lead to special assessments or higher monthly dues for owners.
• Reserve studies are being taken more seriously. If an HOA uses a professional reserve study to plan for future repairs, lenders now have to use the highest recommended savings amount in that study, not a lower estimate. This is designed to make sure buildings aren't underplanning for big repair costs.

What This Means If You Own or Are Buying a Condo

A few practical things to keep in mind:

• Check your individual condo insurance. With the new deductible rules, it's more important than ever to have your own H06 policy that covers the gap between what the building's master policy pays out and what repairs actually cost. If you don't have one, talk to an insurance agent.
• Ask about the HOA's finances before you buy. A well-funded HOA with healthy reserves is going to be easier to finance and less likely to hit you with surprise costs after closing. Ask to see the HOA's budget and reserve study before you make an offer.
• Build extra time into your timeline. If you're buying in a larger condo building, the shift to full reviews means your loan approval process could take longer than it used to. Plan accordingly and work with a loan officer who knows what to expect.

Agents should get HOA documents organized early and it is more important than ever. Lenders are going to ask for more paperwork, including budgets, reserve studies, and insurance documents. Having those ready upfront can prevent delays and keep your closing on track.

Have questions about how these changes affect a specific property or transaction? Reach out and we can walk through it together.

*Movement Mortgage is not affiliated, endorsed, or sponsored by Fannie Mae, Freddie Mac, Federal Housing Administration or any government agency.

Learn more info about the news release: https://www.fhfa.gov/news/news-release/fannie-mae-and-freddie-mac-remove-certain-homeowners-insurance-requirements-that-will-reduce-costs