New condo-lending policies taking effect August 3, 2026 from Fannie Mae and Freddie Mac, government-sponsored enterprises that purchase qualifying mortgages on the secondary market: some purchases could involve greater scrutiny by lenders. While lenders already review condo associations in many cases, the new policies require a closer look at the association’s finances, reserve funding, and building maintenance for some transactions. The changes are intended to better identify condo buildings with financial or structural problems and reduce the risk that owners face unexpected special assessments or higher association dues. (CNBC)

New condominium lending policies from Fannie Mae and Freddie Mac took effect on August 3, 2026. These government-sponsored enterprises buy qualifying mortgages from lenders, so their standards have a major impact on condo financing.

What’s changing?

For many condo purchases, lenders must now perform a more comprehensive review of the condominium association (HOA), including:

• The association’s financial health
• Reserve fund adequacy
• Insurance coverage
• Building maintenance and deferred repairs
• Special assessments
• Any known structural or safety concerns

The previous limited (streamlined) review is no longer available for many transactions, meaning more loans will require a full project review.

What does this mean for buyers?

• Mortgage approvals may take longer.
• Some condo projects that previously qualified may no longer be eligible for financing backed by Fannie Mae or Freddie Mac.
• If a condo project doesn’t meet the new standards, buyers may face:
  • Loan denial,
  • Higher interest rates through alternative financing, or
  • Larger down payment requirements.

Why were these rules introduced?

The changes are intended to identify condo buildings with financial or structural weaknesses before a loan is approved. They are designed to reduce the risk of homeowners facing unexpected special assessments, inadequate reserve funding, or costly deferred maintenance.

Another change is coming

Beginning January 4, 2027, Fannie Mae will generally require condo associations to maintain reserve funding equal to at least 15% of their annual budget (unless an eligible reserve study supports a different amount). This is an increase from the previous 10% guideline and could lead some associations to raise HOA dues.

8/3/2026