Fannie Mae released an update to its project standards on March 18, 2026, significantly increasing the financial responsibility of associations to maintain adequate reserves for capital expenditures and deferred maintenance. We’ve been reviewing it specifically through the lens of reserve studies and what these changes may mean for community reserve planning and funding decisions.
Fannie Mae also notes that these changes are aligned with Freddie Mac and coordinated with the FHFA, indicating a broader shift in lending standards.
Fannie Mae is encouraging immediate adoption of the new guidelines, with certain provisions required beginning August 3, 2026 for the retirement of Limited Review, and January 4, 2027 for the remaining requirements.
Reserve Studies and Lending Requirements
While much of this reflects a refinement rather than a complete shift, a few key changes stand out:
Baseline Funding Not Permitted for Lending.
- Baseline funding is no longer accepted in lending reviews, meaning reserves can no longer be planned using zero funds as the minimum balance.
- Highest Recommended Funding Plan Required. Budgets must include the highest recommended reserve allocation provided by the reserve study provider.
- 15% Minimum Reserve Contribution Requirement. Minimum reserve contributions increase from 10% to 15% of the annual budget.
- Limited Review Retired (Full Review Required). Beginning August 3, 2026, all condo transactions will require a Full Review, replacing the prior Limited Review option with a more comprehensive review, making reserve studies more likely to be reviewed.
Further Detail to Follow
Over the next few weeks we will dive deeper into each new change and how it may affect your association, what you can do to ensure compliance, and how we can help.
If you happen to have a property or situation you’re already thinking about, feel free to reach out or request a proposal here. We’re always happy to take a look or talk it through.
