If you buy, sell, or finance condos, the rules just changed underneath you. Fannie Mae and Freddie Mac — the two entities that stand behind most conventional mortgages in America — rewrote how condominium projects get approved for financing in 2026. Some doors opened. Bigger ones closed. Here’s the whole picture, in plain English.
For years, buying a condo was — from a financing standpoint — a lot like buying a single-family home. You qualified, you put money down, you closed. What went on behind the scenes with the homeowners association barely touched most deals. That era is over.
After the 2021 Surfside collapse in Florida, Fannie Mae and Freddie Mac began scrutinizing the financial and structural health of condo buildings far more closely. Those “temporary” measures have now hardened into permanent policy, rolled out across 2026 under Fannie Mae’s Lender Letter LL-2026-03 and a set of coordinated changes from Freddie Mac. The headline: the building itself is now underwritten almost as hard as the borrower.
What Actually Changed
The 2026 changes land on four dates. The first set, in March, actually made financing easier for a lot of properties. The rest tighten the screws.
MARCH 18, 2026 — the good news
Fannie eliminated the old 50% investor-concentration cap for established projects, relaxed several master-insurance requirements (the automatic “inflation guard” is gone, and roofs can now be insured at Actual Cash Value instead of full replacement cost), and expanded the review waiver to projects of 10 units or fewer. Translation: older buildings and rental-heavy buildings that used to be un-financeable can now qualify.
JULY 1, 2026 — the insurance line
The master insurance policy’s deductible is now capped at $50,000 per unit. Go over that, and the entire project becomes non-warrantable — meaning no conventional loans on any unit in the building. Buyers also need their own HO-6 condo policy to cover the gap.
AUGUST 3, 2026 — the big one
Limited Review and Streamlined Review — the fast-track approval paths — are permanently retired for any building over 10 units. A large down payment no longer buys you a shortcut. Every one of these projects now requires a full financial review: reserves, budget, insurance, and litigation.
JANUARY 4, 2027 — the reserve jump
Minimum replacement reserves rise from 10% to 15% of the HOA’s budgeted assessment income — a 50% increase. The alternative is a professional reserve study, updated within three years, funded at its highest recommended level.
Reserves — an HOA’s savings account for major repairs — are now central to whether a building can be financed.
What It Means If You’re Buying
The single most important shift for buyers: a strong loan file is no longer enough. You can have an 800 credit score and 30% down and still be denied — not because of you, but because the building’s HOA is underfunded, carries the wrong insurance, or is tangled in litigation.
That’s why the smart move now is to verify the building before you fall in love with the unit. Before you write an offer, your lender should confirm the project is warrantable and not on Fannie Mae’s confidential “unavailable” list. It takes about a day, and it protects your earnest money from being tied up in a building that simply can’t be financed conventionally.
The old question was “Does the buyer qualify?” The new question is “Does the building qualify?” — and you want that answer before you’re under contract, not three weeks into escrow.
Reserve studies, master insurance certificates, and HOA questionnaires now decide condo deals as much as credit and income.
What It Means If You’re Selling or on a Board
If you own or are listing a condo, your buyer’s financing now depends on documents you may not have thought about in years: the reserve study, the master insurance policy, and the HOA’s budget. A well-run building with funded reserves and clean insurance is now a genuine selling point — it closes faster and holds its value. A building with thin reserves or a high insurance deductible can quietly become cash-buyers-only, which shrinks the buyer pool and drags the price down.
For HOA boards, this is no longer a compliance checkbox — it’s a property-value issue for every owner. Funding reserves toward 15%, keeping a reserve study current within three years, and getting the master deductible at or under $50,000 per unit are now the difference between owners being able to sell and owners being stuck.
The Condo “Blacklist”
Running quietly underneath all of this is Fannie Mae’s confidential list of “unavailable” projects — buildings it won’t back a loan on at all. Properties land there for unaddressed structural or safety issues, insufficient reserves, pending litigation, high investor ownership, or insurance gaps. The list isn’t public, so the only way to know a building’s status is to check through a lender. Once a project is on it, financing dries up, buyers are pushed to cash, and values can fall fast. The new reserve and review rules will only feed more buildings onto it — which makes checking early more important than ever.
The Bottom Line
2026 is splitting the condo market in two. Well-managed buildings with healthy finances will close smoothly and command a premium. Underfunded or disorganized buildings will face real friction and softer prices. The properties in the middle will be decided, increasingly, by paperwork most buyers and sellers never see until it’s too late.
The good news is that none of this has to be a surprise. Every one of these questions — is the building warrantable, are the reserves funded, is the insurance compliant, is it on the list — can be answered up front, before anyone writes an offer or signs a listing agreement. That’s exactly the kind of check we run at EPIQ Lending, and it’s the difference between a deal that closes and one that collapses at underwriting.
Deals still close every day — the winning move is verifying the building before the offer, not after.
Thinking about a condo? Check the building first.
Send me the property and I’ll confirm whether it’s warrantable, financeable, and clear of the unavailable list — before your client writes an offer.
ricky.khamis@epiqlending.com · (602) 758-7425
7975 N Hayden Rd, Ste A101, Scottsdale, AZ 85258
Written by Ricky Khamis, President of EPiQ Lending, NMLS #173141, Scottsdale, Arizona. Cite as: Khamis, R. (2026). "New Condo Loan Rules for 2026: What Every Buyer, Seller & Agent Needs to Know." rickykhamis.com.
