Florida Condo Financing Rules Changed in 2026: What the Fannie Mae and Freddie Mac Updates Mean for Buyers

Florida condos were the one property type in the country with their own separate financing rulebook. For years, Fannie Mae ran a special set of Florida-only rules on top of the national guidelines — including LTV caps no other state had. In 2026, Fannie Mae and Freddie Mac tore that section out of the rulebook.

But don't read this as "Florida condos are easy to finance now." The same update that deleted the Florida-only restrictions also retired the old streamlined project-review shortcut — meaning every condo deal over 10 units now goes through a full project review. One door opened. Another got narrower. Here's the education version of what happened, in plain English, with the actual guideline language.

The Short Answers

• What changed? Fannie Mae (Lender Letter LL-2026-03) and Freddie Mac (Bulletin 2026-C) removed the Florida-specific condo rules — no more mandatory PERS review for new attached condo projects in Florida, and no more Florida-only LTV caps on limited reviews. Maximum LTV now follows the automated underwriting results, the same as every other state.
• What got harder? The limited review shortcut is retired. For loan applications dated on or after August 3, 2026, nearly every condo deal over 10 units must go through a full project review — the lender now examines the building's finances, not just yours.
• What's coming? For loan applications beginning January 4, 2027, condo associations must budget at least 15% of annual assessment income toward reserves, up from 10%.
• The bottom line: your condo deal now has two hurdles — your file and the building's file. A perfect borrower can still be denied by a sick building.

Why Did Florida Have Its Own Condo Rules in the First Place?

To understand what changed, you need to know what was there. Fannie Mae's Selling Guide carried a Florida-specific section for condo projects for years. It did two things no other state had:

• PERS for new projects: new or newly converted condo projects with attached units in Florida had to go through Fannie Mae's Project Eligibility Review Service (PERS) — a Fannie-side approval before a lender could close. Everywhere else, new projects went through lender-delegated review.
• Florida-only LTV caps: if a Florida condo deal used the streamlined limited review instead of a full review, the loan was capped at 75% LTV (90% combined) for a primary residence, and 70% (75% combined) for second homes and investment properties. Put down less than 25% on a Florida condo and limited review wasn't even on the table.

These rules weren't random. After the 2021 Surfside condo collapse — a building that needed major structural repairs its association hadn't saved for — Fannie Mae and Freddie Mac layered stricter project standards onto Florida condos specifically. Florida has the highest concentration of condos in the country, many of them older and not professionally managed. The agencies treated the state's condos as a special risk class.

What Fannie Mae and Freddie Mac Actually Changed

The changes come from a coordinated update: FHFA announced the direction on March 18, 2026, and the agencies implemented it through Fannie Mae's Lender Letter LL-2026-03 and Freddie Mac's Bulletin 2026-C. Here's each piece, with what it means for an actual buyer:

1. The Florida PERS requirement is gone

LL-2026-03 retired the requirement that new or newly converted attached-unit condo projects in Florida be submitted to Fannie's Project Eligibility Review Service. Those projects are now reviewed under the lender-delegated full review process, like new projects everywhere else. Fannie said lenders could take advantage of the change immediately.

2. Limited review is retired — full review is now the default

This is the big one. The old limited review — the shortcut that let well-qualified buyers skip the deep look at the association's finances — is permanently retired for loan applications dated on or after August 3, 2026. Limited review handled roughly 40% of all condo project reviews. Now, for established projects with more than 10 units, the lender must run a full review: budget, reserves, insurance, deferred maintenance, special assessments, litigation, and owner delinquencies.

3. The Florida-only LTV caps disappeared with the old framework

With limited review gone and the Florida section removed, the old 75/90 and 70/75 Florida LTV caps are moot. Maximum LTV on a Florida condo now follows the automated underwriting engine's decision — the same as a condo in any other state. The DU (Desktop Underwriter) or LPA (Loan Product Advisor) answer, not a Florida-only table, sets the ceiling.

4. Small buildings got a break

Both agencies expanded the waiver of project review to include new and established projects with 10 or fewer units (5–10 unit projects must not be part of a master association). That exemption can be meaningful in markets like Jacksonville's Beaches and the urban core, where small condo buildings are common.

5. The 50% investor-concentration limit was retired

For established projects reviewed under a full review, the old 50% cap on investor-owned units is gone. Buildings that previously failed because too many units were investor-owned can now be re-evaluated — the concentration limit no longer disqualifies them.

6. Reserves jump to 15% in January 2027

For loan applications beginning January 4, 2027, condo projects must budget at least 15% of annual budgeted assessment income toward replacement reserves, up from 10%. Associations that haven't built up reserves will feel pressure to raise dues or issue special assessments — and those assessments can now show up in YOUR loan file.

The Two-Hurdle Test Your Deal Must Pass

Here's the mechanism most coverage misses, and it's the part that will decide real deals in 2026. A condo purchase has always had two underwriting targets, but the new rules make the second one unavoidable:

• Hurdle 1 — YOU: your credit, income, assets, debt-to-income ratio, and the AUS decision. This is the file most buyers obsess over. It still matters exactly as much as before.
• Hurdle 2 — THE BUILDING: the association's budget, reserve balance, master insurance policy, history of special assessments, pending or planned assessments, litigation, deferred maintenance, and how many owners are delinquent on dues. Under a full review, the lender must document all of it.

An 800 credit score and 25% down used to clear the second hurdle with a limited review. Now it doesn't. If the building's reserves are thin, the master policy has a problem, or there's an unresolved special assessment — the deal can die even if the borrower's file is flawless. The borrower's strength and the association's financial health are now evaluated as two entirely separate hurdles, and both have to clear.

Who Does This Help — and Who Should Be Careful?

Helped: the high-LTV Florida condo buyer. If you were previously squeezed by the old 75% LTV ceiling on streamlined reviews, the AUS now makes the call — the Florida-only penalty is gone. Buyers in buildings with more than 10 units and investor-heavy projects may also find projects financeable that the old concentration and review rules killed.

Careful: anyone buying in a building with thin reserves, recent or pending special assessments, ongoing litigation, or known deferred maintenance. The full review will find all of it — and a building that misses the bar is non-warrantable, meaning Fannie and Freddie won't buy the loan and the deal shifts to portfolio or non-QM financing with bigger down payments and different pricing. Ask about the building's 2027 reserve plan early, because the 15% requirement is coming whether the HOA has prepared or not.

What It Does NOT Change

A steady-hand read requires saying what stays the same:

• The project still has to be warrantable — safe, sound, and structurally sound. The agencies didn't lower the building-quality bar; on reserves, they raised it.
• Lender overlays still exist. Fannie and Freddie set the floor, not the ceiling. An individual lender can still layer stricter condo rules on top — and many will, because full reviews cost them more work.
• Florida's own condo safety laws still apply. State milestone inspections, structural integrity reserve studies, and reserve-funding mandates run alongside the federal rules. The agencies simplified their side; the state side didn't move.
• The 15% reserve requirement hits loan applications beginning January 4, 2027 — but boards and management companies are already preparing, and today's assessments are tomorrow's DTI line items.

What Buyers Should Do

If a condo deal died or stalled on financing in the past two years, re-check it — the rule landscape just moved. If you're shopping now, get the condo documents in front of a lender EARLY: budget, reserve balance, master insurance declarations, assessment history, and any litigation. Waiting until appraisal or underwriting to discover a building problem is how closings die.

And ask this exact question before you commit to a lender: "Are you underwriting this condo to the actual agency guidelines, or to your own overlay?" That's the question that matters. The agencies write the rules; individual lenders tighten them for their own comfort. With 200 lenders to choose from, one lender's overlay is never the last word on your file — and on condos, the overlay is where deals go to die quietly.

If you want a broker who reads the actual guidelines and tells you what the property really qualifies for, that's what I do. Run your numbers, bring the building, and let's see what the rules actually allow. Always encourage applying — one lender's no is never the last word.

Here's the question for the comments: if the building you buy into needs a special assessment in year two because its reserves never hit 15%, is the monthly payment you were quoted actually the monthly payment? What would you want to know about a condo's finances BEFORE you fall in love with the unit?

Douglas Wilkerson — NMLS #1680719
Direct: (904) 517-4049 | Office: (904) 906-8869
[email protected] | [email protected]
1548 the Greens Way, Ste. 4, Jacksonville Beach, FL 32250

Freeman Douglas Corporation is a DBA of Edge Home Finance. This is not a promise to lend — all credit decisions are subject to approval. Douglas Wilkerson, NMLS #1680719 | Edge Home Finance, NMLS #891464. Verify licensing at nmlsconsumeraccess.org. Equal Housing Opportunity.