Fannie Mae and Freddie Mac Change Condo Financing Rules

New condominium financing standards from Fannie Mae and Freddie Mac took effect on August 3, 2026, changing how lenders evaluate many condo projects before approving conventional mortgage financing.

The changes retire two review methods that previously allowed eligible established condominium projects to undergo a more limited assessment: Fannie Mae's Limited Review and Freddie Mac's Streamlined Review.

For buyers, the change does not mean that condominium mortgages are no longer available or that every condo loan will become more difficult to obtain.

Instead, lenders may now need to examine more information about the condominium project itself, including its financial condition, reserves, insurance coverage and eligibility under agency standards.

For a condo-heavy market such as Miami condos, the distinction between evaluating the borrower and evaluating the building can be particularly important.

What Changed on August 3?

For loan applications dated on or after August 3, 2026, Fannie Mae no longer allows its Limited Review process.

Freddie Mac made a corresponding change to its Streamlined Review process. Streamlined Review remains available only when the application for the condominium unit mortgage was received before August 3.

These review paths had allowed certain qualifying established condominium projects to be evaluated under a narrower set of project requirements.

With those options retired, many loans that do not qualify for another review exemption or waiver will require a more comprehensive project review.

The rules apply to mortgages intended for delivery to Fannie Mae or Freddie Mac. They should therefore not be interpreted as a universal rule governing every type of condominium financing offered by every lender.

The Building Matters as Well as the Buyer

A buyer may have strong credit, sufficient income and an acceptable down payment and still face additional questions when financing a condominium.

That is because underwriting a condo mortgage involves two separate considerations: the financial qualifications of the borrower and the eligibility of the condominium project securing the loan.

A more comprehensive project review can include examination of the condominium association's budget, replacement reserves, insurance coverage, financial condition and compliance with applicable project standards.

Lenders may also need information concerning inspections, critical repairs, significant deferred maintenance and special assessments when those requirements apply.

If the lender cannot obtain the information required to determine that the project meets agency standards, financing can be affected even when the individual borrower otherwise qualifies for the mortgage.

What This Means for Miami Condo Buyers

For buyers considering a financed condominium purchase within the broader Miami real estate market, building-level due diligence can now become relevant earlier in the transaction.

Before moving too far into a purchase, buyers using conventional financing may want their lender to determine what type of project review will be required and whether sufficient condominium association documentation is available.

Depending on the building and the loan, lenders may request documents or information related to:

• the condominium association budget;
• reserve funding or reserve studies;
• master insurance coverage;
• recent building inspections;
• significant deferred maintenance or critical repairs;
• special assessments;
• the project's overall eligibility under agency requirements.

Not every property will require the same documentation, and not every condo project will require a Full Review. Certain transactions and projects may qualify for waivers, exemptions or other approved review methods.

The practical point for buyers is to investigate financing eligibility early rather than assuming that mortgage approval depends only on personal income, assets and credit history.

Why Sellers Should Pay Attention

The change also matters to condo owners preparing to sell.

A unit can be attractive, competitively priced and in good condition while financing questions arise from the condominium association or building.

If required documents are unavailable, incomplete or reveal an issue with project eligibility, a financed transaction can take longer or encounter additional underwriting requirements.

For sellers, understanding whether the condominium project can provide current financial, reserve, insurance and inspection information may help identify potential financing issues before a buyer reaches the later stages of a transaction.

This is particularly relevant in Miami when the likely buyer pool includes purchasers using conventional mortgages rather than cash.

Condo Associations May Face More Documentation Requests

Florida Realtors has advised real estate professionals to address condo documents, budgets, insurance coverage and project eligibility early in the process.

Associations and property managers may therefore receive more detailed requests for documentation from lenders, buyers and sellers as financing reviews are completed.

Clear and current records can become an important part of the transaction process because lenders need sufficient information to determine whether a project meets the applicable Fannie Mae or Freddie Mac standards.

Some Review Options Are Expanding

The August changes are not simply a tightening of every condominium lending requirement.

Fannie Mae also expanded its Waiver of Project Review for certain qualifying small condominium projects, including some new and established projects with 10 or fewer units.

Freddie Mac likewise maintains separate project review and exemption pathways depending on the project and mortgage.

This is why the practical effect can differ considerably from one condo property in Miami to another.

The change is better understood as a restructuring of condo project underwriting rather than a blanket restriction on condominium mortgages.

Reserve Requirements Are Also Changing

The retirement of Limited and Streamlined Reviews is only one part of a broader series of changes to condominium project standards.

Another important change is scheduled for 2027.

For applicable Fannie Mae and Freddie Mac condo financing, replacement reserve funding expectations are set to increase from 10% to 15% of annual budgeted income beginning in January 2027, subject to the agencies' applicable requirements and permitted reserve-study alternatives.

That future requirement makes the financial planning of condominium associations increasingly relevant to mortgage eligibility.

What Miami Buyers Should Take From the New Rules

The August 3 changes do not mean buyers should avoid condominium properties or assume that financing will be unavailable.

They do mean that the condition and finances of the condominium project deserve attention alongside the price, layout and condition of the individual residence.

For buyers planning to finance a Miami condo, an early conversation with the lender about project eligibility can help identify documentation requirements before they become a closing issue.

In the current financing environment, choosing a condo within the Miami property market increasingly involves evaluating both the individual residence and the building behind it.