New Fannie Mae and Freddie Mac Condo-Lending Rules Take Effect Aug. 3, 2026

Effective Aug. 3, 2026, Fannie Mae and Freddie Mac will end the “limited” or “streamlined” review for most condominium projects. Unless a development qualifies for a waiver—typically smaller projects—lenders must conduct a full review of the condo association’s finances, reserve funding, insurance coverage, and the building’s physical condition before a mortgage can be sold to or guaranteed by the two agencies.

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The overhaul follows the June 24, 2021 partial collapse of the 12-story Champlain Towers South building in Surfside, Florida, which killed 98 people. The National Institute of Standards and Technology’s report cited design and construction flaws compounded by decades of deterioration. In response, Florida enacted condo-reform legislation requiring special inspections and adequately funded reserves. Nationally, Fannie Mae and Freddie Mac tightened condo underwriting after the Surfside collapse, making the changes permanent in 2023.

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• June 24, 2021 – Champlain Towers South collapse, 98 fatalities.

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• June 22 – NIST releases findings.

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• March 18 – Fannie Mae letter describing new underwriting focus.

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• July 16 – AD Mortgage urges modification of the upcoming changes.

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• Aug. 3, 2026 – Full-review requirement becomes effective.

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• Median condo price in June 2026: $380,000, a 1.6 % increase from the prior year; median single-family home price: $446,400.

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• The 2023 American Housing Survey counted roughly 8.6 million condominium units nationwide.

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• Approximately 40 % of condo purchases financed with a mortgage have relied on the limited review and will now require a full review.

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A Mortgage Bankers Association spokesperson said loan timelines will vary by project and documentation availability, but once a condo passes a full review it remains approved in the agencies’ systems for subsequent loans. The Federal Housing Finance Agency did not respond to a request for comment.

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• “It will make the [application] process take much longer and will result in a lot of disqualifying applications,” — Max Slyusarchuk, CEO of AD Mortgage

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• “That is something that will require additional manual human engagement from almost all parties involved, certainly for the mortgage lender and community association,” — Dawn Bauman, CEO of the Community Associations Institute

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Lenders will need to gather detailed financial statements, reserve studies, insurance policies, and condition reports for each condo project undergoing a full review. The added documentation requirements are expected to extend approval times, especially for buildings that previously qualified under the limited review. Buyers denied by lenders seeking to sell loans to Fannie Mae or Freddie Mac may still obtain financing from institutions willing to retain the loan, albeit at higher cost.

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