Condo Financing Is Changing: What Buyers and Sellers Need to Know in 2026

Condo Financing is Changing

If you’re buying or selling a condominium in 2026, it’s worth paying attention to some important changes taking place in the way Fannie Mae and Freddie Mac evaluate condo projects.

Throughout this year, updated requirements have been introduced that affect everything from insurance and reserves to project reviews. While some of the changes are designed to simplify the process, they also put a greater emphasis on the overall financial health and long-term stability of condominium associations.

For condo buyers, this can have a direct impact on whether a property qualifies for conventional financing. For sellers, understanding these requirements early can help prevent financing surprises later in the transaction.

What Changed in March 2026?

Several updates took effect earlier this year, including:

Investor concentration limits were removed for established projects.

Previously, the percentage of units owned by investors could affect a project's eligibility. That restriction has been eliminated for established condo projects, which may provide greater flexibility for some communities.

Actual cash-value roof coverage is now allowed.

Condo projects can now meet applicable insurance requirements using actual cash-value coverage for roofs, providing associations with another option when evaluating their insurance policies.

Smaller projects have a simpler insurance review.

For condominium projects with 2–10 units, the requirements have been narrowed to an insurance review, which may make the financing process more straightforward for smaller developments.

Insurance deductible requirements have been streamlined.

The updated guidelines simplify how insurance deductibles are evaluated, helping reduce some of the complexity involved in determining whether a project meets financing requirements.

What Changed in August 2026?

Additional changes took effect in August, and these may have an even greater impact on how condo projects are evaluated.

Limited and Streamline Reviews have been eliminated.

Condo projects will now generally need to qualify through a Full Review or an applicable waiver. This means the financial and physical condition of a condominium project may receive more scrutiny during the financing process.

Reserve studies are becoming more important.

A well-funded reserve account is an important indicator of a condo association's ability to handle future repairs and maintenance. Reserve studies can now play a greater role in demonstrating that an association is adequately preparing for major capital expenses.

Fidelity bond insurance requirements may apply.

Certain condominium projects will also need to meet applicable fidelity bond insurance requirements, which are intended to provide protection against certain financial losses involving association funds.

Why Do These Changes Matter?

Condo financing has always had an additional layer of complexity because lenders aren't just evaluating the individual buyer—they're also evaluating the condominium project itself.

A buyer can be financially well-qualified and still encounter financing difficulties if the condo project doesn't meet the lender's requirements.

That makes it increasingly important to look beyond the individual unit and understand the health of the association as a whole. Things such as insurance coverage, reserve funding, upcoming assessments, maintenance needs and the association's financial records can all become important pieces of the puzzle.

For buyers, this is one reason it's smart to involve your lender and real estate professional early in the process.

For sellers, reviewing a property's condo documentation before putting it on the market can help identify potential issues before they become a problem during a transaction.

What Should Condo Buyers and Sellers Do?

The best approach is to be proactive.

If you're considering purchasing a condo, talk with your lender about the project's eligibility as early as possible. If you're selling, consider having the condominium documents and project information reviewed before accepting an offer—particularly if your buyer will be using conventional financing.

The good news is that you don't have to figure it all out on your own.

Our team understands the additional considerations that come with condo transactions and can help identify potential financing obstacles early in the process. By reviewing a project upfront and coordinating with the appropriate lending professionals, we can help buyers and sellers better understand their options and avoid unnecessary surprises.

And this isn't the end of the changes. Additional updates are expected in early 2027, so condo financing requirements will continue to be something worth watching.

If you're thinking about buying or selling a condo, let's talk. A little preparation upfront can make a big difference in keeping your transaction on track.