Fannie Mae's 2026 Condo Rule Changes: What Florida Buyers Need to Know

Fannie Mae's Lender Letter LL-2026-03, dated March 18, 2026, retires the Limited Review option for conventional condo loan applications dated on or after August 3, 2026. Previously, many condo projects could qualify for a streamlined Limited Review, which required less documentation than a Full Review. With that option retired, more Florida condo buildings will need to go through the full review process before a unit in that building can be financed conventionally.

Separately, Florida Realtors reports that Freddie Mac is retiring its own comparable Streamlined Review option, which had served a similar purpose for loans sold to Freddie Mac. Buyers and real estate agents should expect project reviews to generally become more thorough across both agencies.

Previously, Florida had a state-specific requirement that new or newly converted attached condo projects go through Fannie Mae's Project Eligibility Review Service (PERS), a more intensive review process. Under LL-2026-03, that Florida-specific PERS requirement is retired. This may simplify the path to approval for some newer Florida projects, though those projects will still need to satisfy the standard Full Review requirements that now apply more broadly.

Within the Full Review certification process, investor-concentration limits, which previously restricted the percentage of units in a project that could be investor-owned, no longer apply. This may open financing options for buyers looking at buildings with a higher share of rental units.

Fannie Mae has also expanded project-review waivers to apply to projects of up to 10 units, an increase from the previous 4-unit threshold. This means smaller condo projects may qualify for a waiver of the full project review in certain circumstances.

A Full Review is a lender's evaluation of the condo association as a whole, not just the individual buyer. It generally examines the association's budget, how much is set aside in reserves, the building's insurance coverage, and its overall financial condition, including any pending litigation or special assessments. Buyers purchasing in a building that now requires a Full Review, where it previously may not have, could see a longer documentation and approval timeline.

With condos, I ask about the building's project status early, because a strong borrower can still hit a wall on an ineligible building.

• Association operating budget and reserve fund balances
• Insurance coverage for the building and common areas
• Overall financial condition, including delinquencies or pending special assessments
• Owner-occupancy and investor-concentration details, where applicable

Fannie Mae is also raising the minimum replacement-reserve allocation for condo projects from 10% to 15% of the annual budgeted income assessment. The change applies to loans reviewed under Full Review with application dates on or after January 4, 2027. For applications dated on or after August 3, 2026, lenders that rely on a reserve study must verify the project's budget includes the highest recommended reserve allocation in that study.

If you're considering a condo purchase in Florida, it's worth asking early in the process whether the building has recently been reviewed under the new guidelines and whether it would qualify for a Full Review, a waiver, or another review path. Because requirements changed for applications dated on or after August 3, 2026, the timing of your application matters. A loan officer can help determine what documentation the building's association will need to provide.