If you are buying, refinancing, or financing a condominium, the new Fannie Mae Condo Insurance Requirements 2026 could impact your loan approval process. Fannie Mae recently announced significant updates to condo project reviews, reserve requirements, insurance standards, and Florida condominium eligibility. These changes are designed to improve the financial stability of condominium associations while helping borrowers navigate rising insurance costs and changing market conditions.

At North Star Mortgage Network, Inc., we help Florida buyers, investors, and condo owners understand how guideline changes affect financing options. If you are purchasing a condo in Jacksonville, St. Augustine, Ponte Vedra, Amelia Island, or anywhere in Florida, these updates are important.

Why the Fannie Mae Condo Insurance Requirements 2026 Matter

Condo financing has become more challenging over the last several years. Rising insurance premiums, deferred maintenance concerns, special assessments, and reserve funding issues have caused many condo projects to face financing restrictions.

Fannie Mae’s new updates focus on:

• Stronger financial health for condominium associations
• Better reserve funding
• More flexible insurance requirements
• Simplified project reviews
• Reduced operational complexity for lenders
• Improved long-term sustainability for condo communities

These changes are intended to create more stability for both borrowers and condominium associations.

Fannie Mae Condo Insurance Requirements 2026: Florida PERS Requirement Removed

One of the most important changes for Florida condominium financing is the retirement of the Project Eligibility Review Service (PERS) requirement for new Florida condo projects with attached units.

Previously, many Florida condo projects required a special Fannie Mae review through PERS. Under the new guidelines, these projects may now be reviewed through the standard lender-delegated Full Review process.

This could result in:

• Faster approvals
• Less documentation
• Reduced review delays
• Greater flexibility for lenders

For Florida condo buyers, this is generally positive news.

Fannie Mae Condo Insurance Requirements 2026 and Small Condo Projects

Fannie Mae expanded eligibility for a Waiver of Project Review.

Projects with ten units or fewer may now qualify for review waivers under certain circumstances. Projects containing five to ten units must not be part of a larger master association or development.

This change may help:

• Smaller condominium communities
• Boutique condo projects
• Townhome-style developments
• Unique residential communities

The waiver can reduce underwriting complexity and speed up financing decisions.

Fannie Mae Condo Insurance Requirements 2026 Eliminate Limited Review

Another major change is the retirement of the Limited Review process.

Beginning August 3, 2026, lenders must use:

• Full Review
• Waiver of Project Review (when eligible)

The previous Limited Review option will no longer be available.

Mortgage professionals, Realtors, and condo associations should prepare for this transition well before the implementation date.

New Reserve Requirements Under Fannie Mae Condo Insurance Requirements 2026

One of the most significant updates involves reserve funding.

Fannie Mae increased minimum reserve allocation requirements from:

10% of annual budgeted assessments
to
15% of annual budgeted assessments

This change becomes mandatory for applicable Full Review transactions beginning January 4, 2027.

Why is this important?

Adequate reserves help condominium associations:

• Fund future repairs
• Reduce special assessments
• Improve financial stability
• Maintain property values
• Reduce default risks

Buyers should expect lenders to pay closer attention to reserve funding moving forward.

Enhanced Reserve Study Standards

Reserve studies are now receiving greater scrutiny.

When lenders rely on reserve studies to demonstrate adequate reserves, the association’s budget must include the highest recommended reserve allocation identified in the reserve study.

Fannie Mae also eliminated the baseline funding method that allowed reserve balances to approach zero.

This change reinforces the importance of properly funded associations.

Fannie Mae Condo Insurance Requirements 2026: Insurance Changes

The insurance section contains some of the most practical changes.

Fannie Mae has simplified how lenders verify insurance sufficiency while still maintaining adequate protection standards.

Roof Coverage Requirements

One of the most notable updates is that roofs must still be insured but no longer need to be insured on a replacement cost basis.

This may help:

• Condominium associations
• Individual homeowners
• Florida property owners facing insurance challenges

Inflation Guard Coverage Removed

Fannie Mae retired the requirement for inflation guard coverage in condo master insurance policies.

This change may help associations control insurance costs while still maintaining required coverage levels.

New Deductible Rules

Master insurance policies may now have deductibles up to:

$50,000 per unit

If the condo master policy includes a per-unit deductible, borrowers must obtain a unit owner’s insurance policy that covers the deductible exposure.

This makes individual HO-6 coverage even more important for condo owners.

Fannie Mae Condo Insurance Requirements 2026 and HO-6 Insurance

Under the new requirements, a unit owner’s insurance policy is required when:

• Interior components are not fully covered by the master policy
• The master policy contains a per-unit deductible

Coverage must be sufficient to restore the unit and cover any applicable deductible requirements.

Borrowers should work closely with qualified insurance professionals to ensure proper protection.

How These Changes Affect Florida Condo Buyers

Florida remains one of the largest condominium markets in the country.

Many buyers are concerned about:

• Condo eligibility
• Rising insurance costs
• Special assessments
• Reserve funding
• HOA financial stability

The new Fannie Mae guidelines attempt to address these concerns while creating clearer financing standards.

For buyers, this means:

• More attention on HOA financial health
• Greater scrutiny of reserves
• Better transparency
• Potentially fewer financing surprises

How North Star Mortgage Network Can Help

At North Star Mortgage Network, Inc., we specialize in helping Florida condo buyers navigate changing lending guidelines.

Whether you are purchasing a condo in:

• Jacksonville
• Ponte Vedra Beach
• St. Augustine
• Amelia Island
• Fernandina Beach
• Orange Park
• Jacksonville Beach
• Anywhere in Florida

we can help determine whether a condo project meets Fannie Mae, FHA, VA, or conventional financing requirements.

Our team can review:

• Condo project eligibility
• HOA documentation
• Insurance requirements
• Reserve funding
• Loan options
• Down payment assistance programs

before you spend money on inspections and appraisals.

Get Expert Help With Fannie Mae Condo Financing

The new Fannie Mae Condo Insurance Requirements 2026 represent one of the most significant condo financing updates in recent years. Understanding these changes before you make an offer can save time, money, and frustration.

If you are considering purchasing, refinancing, or investing in a Florida condominium, contact North Star Mortgage Network today for a free consultation.

Nathan Young
North Star Mortgage Network, Inc.
NMLS #325206
Cell/Text: 904-613-7700
Office: 904-880-6741