There are new condo rule changes for Fannie Mae and Freddie Mac loans as of March 2026.

Fannie Mae and Freddie Mac back many mortgage loans in the United States. Though they don’t directly lend, they do purchase loans from banks, so their rules and regulations affect many conventional mortgage loans.

Mortgage companies rely on Fannie Mae and Freddie Mac rules and regulations when they are working on loans for home purchase mortgages and mortgage refinances in both condominiums and HOA communities. Loans in communities that don’t meet Fannie and Freddie regulations may be denied.

Here are some of the changes – some beginning as early as August 3, 2026 for condo and HOA communities backed by Freddie and Fannie:

1) Possible Higher Reserve Funding Requirements. The current standard is that 10% of a community’s annual assessment should go toward reserve replacement. This would be raised to 15% of the community’s annual assessment. If an HOA community or condo complex does not meet the 15% minimum, it could make a community ineligible for conventional financing. An alternative would be if the community meets a certain reserve study standard. Essentially, the community could potentially still qualify if its budget matches the highest recommended reserve funding level identified in its reserve study. The start date for this change would be January 4, 2027.

  • a) As of August 3, 2026, condo and HOA associations that do not meet the current 10% (soon to be 15%) minimum, may potentially rely on reserve studies to demonstrate adequate reserves. That being said, they must be budgeted at the highest recommended level in the study.

2) Established buildings should no longer have limits on the number of units owned by investors. Prior to this change, in buildings that had more than 50% of units owned by investors, buyers had trouble qualifying for conventional financing.

3) A Full Review of an Association will be needed in all HOA and Condo cases except small communities with less than 10 units. Beginning August 3, 2026, most condo projects will require a full lender review instead of the “streamlined” process than the past. The new rules mean that there will be more documentation required from the Condo and HOA Associations, a more thorough examination of the community’s finances, and potentially longer loan approval times.

Thank you to Movement Mortgage and Becker & Poliakoff for breaking down these conventional loan Fannie Mae and Freddie Mac changes in posts on their sites. Please note that there may be additional rules, regulations, and documentation that a loan may require.

If you are considering buying a condo in Timonium, Towson or the surrounding areas, please contact me. I work with professional lenders who can work with the changes to best support your conventional loan home buying experience while you purchase your new condo with me!