2026-09-10 · Alabama · Compliance

The quiet route through condominium project eligibility is gone. For Alabama associations, that means a lender question that used to be answered from a two-page form is now answered from the association's actual documents.

Fannie Mae's Selling Guide section on project standards, B4-2.1-01, in the version dated August 5, 2026, contains no Limited Review pathway at all.¹ Limited Review was retired for loan applications dated on or after August 3, 2026.

What remains are four routes: a project-eligibility waiver, Full Review through Condo Project Manager, Fannie Mae Review through PERS, or FHA approval.

Why this reaches the board and not just the buyer

Limited Review existed to let a lender approve a well-collateralised loan in an established project without examining the project itself. Under a Full Review, the lender examines the project — and the project's paperwork comes from the association.

That means budgets, reserve figures, the master insurance certificate, litigation disclosures, owner-occupancy and delinquency percentages, and the answers on a lender questionnaire signed by someone at the association or its management company. A Full Review is an audit of the association conducted through the buyer's mortgage file.

The insurance requirement it runs into

The parallel change is in B7-3-03, master property insurance requirements for project developments, also dated August 5, 2026.² It requires:

• coverage of at least 100% of the estimated replacement cost value of the project improvements, “including common elements and residential structures”;
• a deductible no greater than 5% of the master policy coverage amount per occurrence;
• a deductible no greater than $50,000 per unit, with a per-unit deductible triggering a unit-owner policy requirement; and
• windstorm among the required perils, “including named storms designated by the U.S. National Weather Service or the National Oceanic and Atmospheric Administration by a name or number.”

On the Alabama coast those numbers collide with the market. Named-storm deductibles well above 5% are ordinary on Gulf-front buildings, and the state's residual wind market does not write blanket coverage or multi-building schedules at all.

1. Fannie Mae Selling Guide B4-2.1-01, General Information on Project Standards (version 08/05/2026) ↩
2. Fannie Mae Selling Guide B7-3-03, Master Property Insurance Requirements for Project Developments (version 08/05/2026) ↩
3. FHA INFO 2026-10 (May 20, 2026) — condominium single-unit approval case numbers, HUD Office of Single Family Housing ↩