You read the new condo rule as a small technical change to reserve funding and filed it under things lenders worry about. Run the arithmetic and it is a 50 percent jump in what an association must set aside, and the only place most buildings can find that money is the dues line.
On his weekly show, a real estate coach walks through the new Fannie Mae and Freddie Mac condo rules with his team, and has a producer look up the dates live on air.
The change: instead of 10 percent of the budget going to reserves each year, it becomes 15 percent. As he says on the show, "the increased 15% reserve funding mandate takes effect January 2027." The retirement of streamlined reviews already took effect on August 3.
Then he does the math out loud that most write-ups skip. Ten to fifteen is a 50 percent increase, and in a large complex that is a lot of money. Some associations were already funding at that level. Many were not, and his read is that the only way they get there is by charging higher HOA dues, which lands on owners who bought under a completely different number. Buildings that can never get there, he says, leave owners unable to sell to anyone using a Fannie Mae or Freddie Mac loan.
He flags a second, more immediate problem for anyone with a condo under contract: the added underwriting review of bylaws and documents takes long enough that ordering HOA docs at the usual point in escrow will back up your closing. That means ordering and paying for them earlier, sometimes before the buyer even knows the loan can move forward. A figure looked up on the show put Fannie and Freddie at about 70 percent of loans.
“the increased 15% reserve funding mandate takes effect January 2027.”
The cost of ignoring this is a spring closing that dies on a document nobody ordered in time. Condo files already carry the most third-party dependencies of any deal you write, and this adds a review step with a real calendar cost in the middle of them.
The wider change is what you say to a condo owner in your database. Their dues are one budget cycle away from moving, and the buildings that cannot fund the requirement become harder to sell into. That is a reason to call, and it is a better reason than a market update.