Horizontal Property Regime Mortgage 2026: How HPR States Handle Condo Financing

Horizontal Property Regime (HPR) is the legal framework used in Puerto Rico, the U.S. Virgin Islands, and certain U.S. states to establish condominium-style individual unit ownership within a shared structure. HPR statutes serve the same functional purpose as standard condo laws but differ in their recording structure and declaration requirements.

Where HPR Applies

• ✦Puerto Rico: the Horizontal Property Act governs all condominium ownership on the island
• ✦U.S. Virgin Islands: HPR statute provides the legal framework for condo ownership
• ✦Some southern U.S. states use HPR terminology for certain condominium structures created under older statutes
• ✦HPR requires a master deed or horizontal property regime declaration recorded with the local land registry

Fannie Mae and Freddie Mac Project Review

Fannie Mae and Freddie Mac apply the same project eligibility requirements to HPR projects as they do to standard condominiums. The project must be established under a validly recorded HPR declaration, maintain owner-occupancy ratios meeting agency standards, and have an HOA with adequate reserve funding. Limited review or full review applies based on the same thresholds used for standard condo projects.

FHA Condo Approval Under HPR

FHA requires that HPR projects obtain approval through the HRAP or DELRAP process, the same as standard condominium projects. The HPR declaration must be validly executed under local law, the project must contain at least two units, and the HOA must maintain adequate hazard and fidelity insurance coverage. Puerto Rico condo projects must appear on the FHA-approved condominium list for FHA-insured financing to be available.