Condo or Single-Family? The January 2027 Reserve Change

When you purchase a condo, you’re also buying into the association and its management. Starting in January 2027, lenders will look at that association much more closely.

What’s changing

Fannie Mae and Freddie Mac will raise the minimum reserve requirement for condo associations from 10% to 15% of the annual budget, and lenders are moving back to full project reviews.

Why it matters

If your association fails to meet any of the financial or insurance requirements, the complex becomes ineligible. That shuts off conventional financing, the most common kind of mortgage, for every buyer in the complex. Fewer buyers who can get a loan means less demand for the units, and that reduces the value of your condo.

An association below the new minimum may still qualify with a recent reserve study, so ask whether one has been done.

What to check before you buy

Check out the HOA and its financial fitness carefully before signing. Ask for the current budget, the reserve study and the latest financial statements, and ask whether the association has had any trouble keeping its insurance.

If you already own a condo, ask your board how it plans to meet the new minimum.

Or better yet, call me…

Originally published in The Trusted Advisor, August 2026.