Fannie Mae and Freddie Mac announced significant condo project review changes effective August 3, 2026. Lenders may implement these changes immediately. The core change: limited review for established condo projects is retired. Full reviews are now required for all established condo projects that do not qualify for an exemption.
What Is Still Exempt
The exempt-from-review category has been expanded. Two-unit to ten-unit projects may qualify for the Exempt from Review classification under certain conditions. However, five-unit to ten-unit projects are not eligible for Exempt from Review if the project is part of a Master Association. The 50% owner-occupancy requirement has been retired for investment properties in established condos.
Florida Condo Specifics
Florida established condos have additional complexity under the new rules. Fannie Mae Approved by Fannie Mae status is no longer required under reciprocal review for Florida condos. The LTV limits under Section 5701.9 are retired with the Certified by Lender change. Florida condo lending requires careful project review given recent legislative changes around reserves and inspections.
Reserve Threshold Increasing in 2027
The minimum replacement reserve threshold is rising from 10% to 15% of HOA annual budgeted income, effective January 4, 2027. Projects at or near the 10% threshold may fail full review after January 2027. Review HOA budgets carefully on any condo transaction closing near or after that date.
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