New Fannie Mae and Freddie Mac Rules Make Condo Mortgages Harder to Get
Fannie Mae and Freddie Mac implemented new underwriting rules for condominium mortgages on August 3, 2026, eliminating the streamlined review process used in about 40 percent of condo loan applications. Buyers should expect longer approval timelines and stricter documentation requirements.
Buying a condo with a mortgage just got more complicated. Fannie Mae and Freddie Mac implemented new underwriting rules on August 3, 2026, that eliminate the streamlined review process previously used for roughly 40 percent of condominium mortgage applications.
Under the old system, many condo loans could be approved through a limited or streamlined review that required less documentation about the building's finances and condition. That option is now gone for most transactions. Lenders must now conduct a full review of the condo association's finances, reserve funding, insurance coverage, and building condition.
The changes follow the 2021 collapse of the Champlain Towers South building in Surfside, Florida, which killed 98 people. Regulators and lenders have since pushed for stricter standards to ensure that condo buildings have adequate reserves for maintenance and repairs.
The full review process requires more manual work and documentation, which means longer approval timelines. If a building fails to meet the new standards, lenders may deny the mortgage application entirely. However, once a project passes a full review, it is recorded in the Fannie and Freddie systems, so the process does not need to be repeated for every subsequent loan in that building.
Starting January 4, 2027, condo associations will generally need to set aside at least 15 percent of their annual budget for major repairs, up from the previous 10 percent requirement.
Some exceptions apply. Condo projects with 10 or fewer units may bypass the project review process. Florida also received a specific adjustment: new condo projects there no longer require a special Fannie Mae approval, allowing lenders to handle the review internally.
