Potential Increase to Fannie Mae Condominium Reserve Requirements

What Associations Should Be Thinking About Now

By Scott Wolf, CEO

A potentially significant shift in condominium lending standards may be on the horizon.

Fannie Mae is reportedly strongly considering increasing the minimum annual reserve contribution requirement for condominium associations from 10% to 15% of the operating budget. While not yet finalized, this change is viewed as highly likely, with a potential effective date of January 1, 2027.

If adopted, this would represent a 50% increase in the baseline reserve funding requirement — a meaningful adjustment for many communities.

Why This Matters

Fannie Mae guidelines heavily influence whether condominium units qualify for conventional financing. When associations do not meet eligibility standards, buyer access to loans can narrow — potentially affecting marketability and property values.

Reserve funding levels are one of the key metrics lenders evaluate.

An increase from 10% to 15% may require some associations to re-evaluate budget structures and long-term financial planning.

Timing Is Important

Although the anticipated effective date is 1/1/27, the budgeting impact may begin sooner.

Any fiscal year that begins in 2026 and extends into 2027 would likely need to account for the higher threshold if the change is implemented. For communities currently funding at 10%, early modeling and communication will be critical.

Proactive planning avoids reactive assessment increases.

A Broader Industry Trend

In recent years, we’ve seen increased scrutiny around structural integrity, deferred maintenance, and reserve adequacy nationwide. A higher reserve requirement would align with this broader push toward financial stability and risk mitigation in condominium communities.

The BRIGS Perspective

At BRIGS, we closely monitor national lending and regulatory developments so the communities we serve can plan ahead — not catch up.

There is no immediate action required today. But forward-thinking Boards and managers should begin evaluating where they stand and how upcoming budget cycles may intersect with 2027.

Strong communities are built on informed decisions and disciplined long-term planning.

We will continue to provide updates as more definitive guidance becomes available.