Fannie Mae and Freddie Mac tighten condo financing rules through 2027

September 27, 2026 at 08:00 PM2 min

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Fannie Mae and Freddie Mac are tightening condo financing standards, eliminating limited reviews and raising reserve requirements from 10% to 15% of assessment income starting January 2027. The changes aim to improve condo safety after the 2021 Surfside, Florida collapse but add new hurdles for a market already facing falling prices and weak demand.

Key Facts

Fannie Mae and Freddie Mac eliminated limited reviews for condo mortgages last month, requiring closer reviews for all but the smallest buildings.
Starting January 2027, Fannie Mae and Freddie Mac will require condo associations to allocate at least 15% of assessment income to reserves, up from 10%.
Nationally, condo prices have fallen 2% from their peak, with Punta Gorda, Florida down 35% and Tampa down 24% from September 2022 peaks.
Condo sales fell 2.7% in August year-over-year, compared to a 1.1% decline for single-family homes, according to National Association of Realtors data.
Months of condo supply nationwide sits at 6.6 months, versus 4.7 months for single-family homes.

Financing Rule Changes

Fannie Mae and Freddie Mac, which support about 70% of the mortgage market, are tightening standards for acceptable condo financing. Limited reviews that allowed many highly qualified buyers to receive mortgages after a cursory look at a condo building's financial and structural health were eliminated last month. Starting in January 2027, Fannie and Freddie will require condo associations to allocate at least 15% of their assessment income toward reserves, up from 10% today. The changes are part of an ongoing effort to improve condo safety after the deadly collapse of an aging building in Surfside, Florida, in 2021.

Market Impact

Condo prices nationally have fallen 2% from peak prices a few years earlier, according to Zillow data. Prices in Punta Gorda, Florida, have dropped 35% from their September 2022 peak, while Tampa has seen a 24% decline. The median condo in Austin, Texas, is down 28%, while prices in Denver and Raleigh have fallen more than 16%. Condo sales were down 2.7% in August compared to a year earlier, while single-family home sales saw a smaller 1.1% drop, according to National Association of Realtors data. Nationwide, months of condo supply sits at a buyer-friendly 6.6 months, while single-family homes are at a more balanced 4.7 months.