2026-09-10 · Kansas · Compliance

Since August 3, a buyer of a Kansas condominium unit can no longer get a conventional loan on the strength of a large down payment and a short questionnaire. Fannie Mae retired the Limited Review process for loan applications dated on or after that date, in Lender Letter LL-2026-03 issued March 18, 2026.¹

Because Kansas has no state condominium-financing regime of its own, secondary-market underwriting standards are the operative rules for whether units in a Kansas project can be sold, and this is the largest change to them since the post-Surfside tightening began.

What Limited Review was

A streamlined project review. Where a borrower put enough money down, the lender could approve the project on a short-form basis, without the full documentary examination of the association's budget, reserves, insurance, litigation status, investor concentration and delinquency rates. According to figures circulated by the Community Associations Institute, it accounted for roughly 40 percent of all condominium project reviews.²

Established projects that would previously have qualified must now be reviewed under Full Review, or under a Waiver of Project Review where one is available.

What replaced it, and the one softening

Full Review means the lender examines the project itself: budget and reserve allocation, insurance including deductibles, pending litigation, delinquency rates, commercial and investor concentration, and the presence of significant deferred maintenance or unsafe conditions. It also means checking the project's status in Fannie Mae's Condo Project Manager database, where projects flagged as ineligible are recorded.

Fannie Mae did move in the other direction on one point. In the same March 2026 letter it expanded the streamlined Waiver of Project Review to projects with ten or fewer units, and retired the 50 percent investor concentration limit for established projects under Full Review.³ For the small Kansas condominium regimes that are common outside the metros, that is a genuine easing.

Why this reaches associations and not just lenders

Because the lender's questions go to the association, and the association's answers determine whether the sale closes.

1. Fannie Mae Lender Letter LL-2026-03 (March 18, 2026) — condo project eligibility and insurance policy changes ↩
2. Fannie Mae's New 2026 Condominium Lending Guidelines — Michigan Community Association Law Blog, May 11, 2026 ↩
3. 2026 Fannie Mae and Freddie Mac condo rule changes: key dates ↩
4. K.S.A. 58-4620, Adoption of budget; special assessments — Kansas Office of Revisor of Statutes ↩