Limited Review is gone, and Colorado condos need a 15% reserve allocation by January 4
Limited Review is gone, and Colorado condos need a 15% reserve allocation by January 4
2026-09-10 · Colorado · Compliance
The shortcut that let roughly two in five Colorado condominium loans skip a look at the association's finances no longer exists, and on January 4, 2027 the reserve bar rises by half. Fannie Mae retired the Limited Review process for loan applications dated on or after August 3, 2026, and codified the change in its Selling Guide on August 5, 2026. Every conventional loan on a unit in a project over ten units now goes through Full Review.1
The Selling Guide topic is now titled “Full Review Process (08/05/2026).” The old Limited Review topic returns a 404, and “Limited Review” no longer appears in the chapter's table of contents.
What Full Review means for an association
A Full Review means the lender must obtain and evaluate the association's budget, reserve funding, insurance, delinquency rates, pending litigation, special assessments and inspection reports. An association that could previously stay financially opaque and still have its units sell cannot any more.
The documentation the lender may need, per the Guide, includes legal and recorded documents and the declaration; project budgets, financial statements and reserve studies; construction plans; architects' or engineers' reports; completion reports; environmental hazard reports; attorney opinions; appraisals; evidence of insurance policies; and a condominium project questionnaire.
The reserve math, and the number that changes
As of the current Guide, the lender must confirm the association's projected budget provides for replacement reserves “that is at least 10% of the budget,” computed by dividing the annual budgeted replacement reserve allocation by annual budgeted assessment income.
Excludable from that denominator: incidental income the project does not rely on; income collected for utilities individual owners would normally pay; income allocated to reserve accounts; and special assessment income.
That last exclusion is the one boards need to understand. An association cannot special-assess its way to the ratio.
And the 10% becomes 15% for loan applications dated on or after January 4, 2027. Fannie's stated reason is a “direct correlation between underfunded reserves and projects in need of critical repairs.”
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Related Colorado HOA Topics
- Fannie Mae Selling Guide B4-2.2-01, Full Review Process (08/05/2026) — reserve calculation, reserve study standards, delinquency caps and CPM statuses ↩
- Fannie Mae Selling Guide B4-2.1-02, Waiver of Project Review (08/05/2026) ↩
- Fannie Mae Selling Guide B4-2.1-01, General Information on Project Standards (08/05/2026) ↩
- "What Fannie Mae & Freddie Mac's Latest Policy Changes Mean for Condominium Associations, Lenders, and Homeowners" (March 18, 2026), Community Associations Institute Advocacy ↩
- HB26-1099 final act text, new C.R.S. 38-33.3-209.2 — Colorado's thirty-year declarant reserve study requirement ↩
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