Fannie Mae and Freddie Mac Rewrite Condo Lending Rules: What Florida Unit Owners Should Know

Whether a condominium unit can be financed often decides whether it can be sold, and at what price. On March 18, 2026, Fannie Mae and Freddie Mac announced coordinated changes to the way lenders review condominium projects, issued in alignment with each other and in consultation with their regulator, the Federal Housing Finance Agency ¹². Several changes remove restrictions that applied only to Florida. Others tighten the reserve rules that many Florida buildings already struggle to meet.

What Changed for Florida Buildings

Both agencies said they were responding to industry feedback and market conditions, including rising insurance premiums ¹². For Florida, three changes stand out.

• New projects. Fannie Mae retired its requirement that new or newly converted Florida projects with attached units be submitted to its Project Eligibility Review Service. These projects can now be reviewed under the lender-delegated Full Review process, like new projects elsewhere ¹. Freddie Mac likewise no longer requires these Florida projects to carry an “Approved by Fannie Mae” status ².
• Limited Review ends. Fannie Mae is retiring its Limited Review process, and Freddie Mac is retiring its comparable Streamlined Review, for loan applications dated on or after August 3, 2026 ¹². Fannie Mae noted that this effectively retires the remaining geographic restrictions that apply to Florida, which stay in effect until that date ¹. After August 3, established projects must go through a full review or, where eligible, a waiver of review ¹.
• Investor limits. Both agencies retired the 50% cap on investor-owned units in established projects ¹².

Small buildings also get relief. Projects of ten or fewer units can qualify for a waiver of project review, if the building does not have an “Unavailable” status in Fannie Mae’s Condo Project Manager and meets insurance requirements; buildings of five to ten units must not be part of a master association ¹.

Tighter Reserve Rules

The agencies tied the reserve changes to a pattern they observed after adopting critical repair rules in 2023: buildings with underfunded reserves tend to be the ones needing critical repairs, and their owners face “substantial financial hardship” from unexpected special assessments or higher dues, which can lead to mortgage default or foreclosure ¹².

Two changes follow. First, for loan applications dated on or after August 3, 2026, a building that relies on a reserve study must budget the highest recommended reserve allocation in that study, and the “baseline funding” method, which lets the reserve balance approach but never fall below zero, no longer qualifies ¹². Second, for applications dated on or after January 4, 2027, the minimum reserve allocation for capital expenditures and deferred maintenance rises from 10% to 15% of the annual budgeted assessment income ¹².

What This Means for Unit Owners

The changes cut both ways for Florida owners. A building that could not be financed because of Florida-only review rules may now qualify, which can widen the pool of buyers. But a full review will look harder at the budget, and an association that underfunds reserves may find buyers’ lenders unable to close until the budget is raised. Raising reserves to 15% of assessment income generally means higher monthly dues. Buildings that already need critical repairs still face the “Unavailable” status that blocks agency financing ¹.

For an owner already stretched by a special assessment, a higher monthly payment and a harder sale can arrive at the same time. Unpaid assessments can lead to an association lien and foreclosure, and a mortgage default can follow. Owners in that position have options worth understanding early, including whether a Chapter 13 plan could allow them to catch up on assessment or mortgage arrears over time, or whether a sale or a Chapter 7 filing makes more sense.

Unit owners in South Florida facing assessments, liens or mortgage trouble can request a confidential consultation with The Roca Law Firm, in English or Spanish.