Why the master-association condition is the Michigan question

Because the multi-phase master-association structure is close to standard here. Michigan developers routinely recorded a master deed for a project built out in phases, with sub-associations or a master association coordinating shared roads, drainage, entrances and amenities. It was the ordinary way to build a Michigan condominium of any size across the 1990s and 2000s.

Under the new rules, whether a small project sits inside such a structure becomes the single fact that decides its financing path:

• A standalone eight-unit project — waiver. Effectively no project review at all. This is a significant loosening for exactly the projects that struggled most.
• The same eight units inside a master association — Full Review. Every reserve, insurance, litigation and deferred-maintenance question, on a project whose small budget makes those answers hardest.

Two neighbouring Michigan projects of identical size and condition can now land on opposite sides of that line because of how a developer papered the phasing twenty-five years ago.

What a board can establish now, in this order

1. Is the project part of a master association or a multi-phase development? Read the master deed and any recorded cross-easement or shared-facilities agreement. Do not rely on whether anyone currently calls it a master association — many Michigan masters are dormant on paper and alive in the documents.
2. How many units does the project contain? The project as defined in the master deed, not the building.
3. If Full Review is the path, get the file ready. Current budget showing the reserve allocation, the reserve study and its funding method, the master insurance policy with the per-unit deductible, litigation disclosure, and the deferred-maintenance position. Lenders will ask, and an association that takes six weeks to answer costs its owners deals.
4. Check Condo Project Manager. A project flagged “Unavailable” is ineligible for sale to Fannie Mae regardless of everything else, and boards frequently learn about the flag from a failed closing rather than from anyone official.

Two other changes in the same package

Owner-occupancy checks eased. Sellers no longer determine owner-occupancy compliance when reviewing an Established project; presale requirements still apply to New projects. Fannie Mae separately eliminated the 50% investment-property concentration limit. For Michigan projects with heavy investor ownership — common in Ann Arbor, East Lansing and Detroit — that removes a long-standing barrier.

No grandfathering. Freddie Mac's bulletin is explicit: an unexpired project review completed before these dates does not exempt a project. The seller must confirm compliance with the new requirements for applications received on or after each effective date.

What to watch next

The 15% reserve floor on 4 January 2027, which lands on the same projects. A small standalone project that escapes review entirely does not face it. A project inside a master association faces both changes at once, four months apart.