In Florida, summer is a time when families often choose to move to a new home. Whether it’s a better school system for the children, being closer to the beach, or just thinking it’s time to let go of all that yard work, community living offers many reasons to make a move.
Often, getting a mortgage is a part of the moving process. Recently, Fannie Mae and Freddie Mac made some changes to the guidelines they use in considering a mortgage on a condominium. I asked Claude to provide some insight into these recent changes.
Here’s what’s changing and what Florida associations can do about it.
What changed (Fannie Mae Lender Letter LL-2026-03 and Freddie Mac’s matching bulletin, issued March 18, 2026):
Reserve funding minimums are rising from 10% to 15% of annual budgeted assessment income, effective for loans dated on or after January 4, 2027 — unless the association has a qualifying reserve study on file (completed within 36 months, funded at the study’s recommended level rather than the older “baseline” method).
The Limited Review and Streamlined Review pathways — which allow many established, low-risk buildings to skip a deep underwriting review — are being retired for loan applications dated on or after August 3, 2026. Nearly every project will now go through Full Review, which digs into the budget, reserves, insurance, delinquency rate, litigation, special assessments, and inspection reports.
Master insurance policies with a per-unit deductible above $50,000 make a project non-warrantable starting July 1, 2026.
Any structural or mechanical inspection completed within the prior three years must be reviewed by the lender; unaddressed critical repairs, active evacuation orders, or unresolved safety issues render the project ineligible until the issues are fixed and documented. Related to this, if critical component repairs (foundation, roof, load-bearing structures) exceed $10,000 per unit and aren’t funded, the project is ineligible.
Delinquency over 15% of units 60+ days past due on assessments also triggers ineligibility.
For Florida specifically, the retirement of Limited Review removes what had been an extra geographic hurdle — Fannie Mae is also dropping the requirement that new/newly-converted attached-unit condo projects go through its Project Eligibility Review Service, shifting them to lender-delegated Full Review. But Florida’s own structural integrity law (milestone inspections and Structural Integrity Reserve Studies, SIRS) intersects directly with these federal rules: over 1,400 Florida buildings are already on Fannie Mae’s restricted list. As of January 1, 2026, Florida associations can no longer waive or underfund reserves for the eight SIRS-mandated structural components, and Citizens Property Insurance won’t write or renew policies for buildings that are out of compliance with milestone/SIRS requirements — which then feeds back into the insurance-deductible and structural-repair eligibility rules above.
What associations can do to become/stay eligible:
Get a current reserve study (within 36 months) that uses the recommended (not baseline) funding method and adopt a budget that funds reserves at that recommended level — this is the main way to avoid the 15% hard threshold.
Complete required milestone inspections and SIRS on time, and fund reserves for the eight SIRS structural components without waivers, since this is now legally required in Florida and directly affects lender review.
Resolve any flagged critical repairs and get certified sign-off (engineer’s letter or CPA certification) confirming remediation, since lenders/Fannie Mae need documented proof, not just a plan, to clear a “Critical Repairs” or “Inadequate Reserves” flag.
Keep delinquencies under 15% of units, as the assessment collection policy affects eligibility.
Shop or restructure master insurance to keep the per-unit deductible at or below $50,000.
Where reserve or repair gaps exist, boards frequently must levy a special assessment to close the gap quickly rather than spreading it over years, since lenders want current funding, not a future plan.
Sources:
- 2026 Fannie Mae and Freddie Mac Condo Requirements: What Boards Need to Know
- 2026 Fannie Mae & Freddie Mac Condo Rule Changes: Key Dates
- Fannie Mae Condo Guidelines 2026: New 15% Reserve & Review Rules
- Condo financing rules to change in 2026 | Florida Realtors
- Fannie Mae & Freddie Mac Condo Reserve Requirements Guide
- Fannie Mae & Freddie Mac Changes – What Community Associations Need to Know | Becker & Poliakoff
- Fannie Mae’s New Regulations Require Condos to Raise Assessments | RMWBH Law
- Florida SIRS Reports Explained: What Condo Buyers Need to Know in 2026 | GoverningDocs
- SIRS vs. Milestone Inspection: Essential 2026 Guide for Florida Condo Boards
- Florida Condo Mortgage Eligibility: 2026 Insurance Rules
This is a fast-moving regulatory area — worth confirming current status with a Florida real estate attorney or the association’s manager before making decisions, since dates and thresholds are still being finalized by lenders.
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