2026-09-12 · Michigan · Regulation

What happened. As of 1 July 2026, if a condominium master property insurance policy includes a per-unit deductible, that deductible may not exceed $50,000 per unit for the project's units to remain eligible for conventional financing. Fannie Mae and Freddie Mac imposed the cap in coordinated changes issued 18 March 2026.¹

The old rule was a 5% per-unit maximum, and it has been retired in favour of the flat dollar cap. The general all-perils deductible cap of 5% of the dwelling coverage limit remains.

Why this closes a door Michigan boards have been using

Association master policy premiums have risen sharply, and the standard board response has been to absorb the increase by raising the deductible — particularly the wind and hail deductible. It is the one lever that does not require an assessment increase and does not require owner approval.

That lever is now capped for any project whose owners need to be able to sell to a financed buyer.

The other insurance changes in the same package

• Roofs may be insured at actual cash value. The requirement to insure roofs on a replacement-cost basis has been retired — the master policy must carry coverage on a replacement cost basis excluding roofs. Roofs must be insured, but not to replacement cost.
• Inflation guard retired in its entirety. Coverage sufficiency may now be evidenced by a guaranteed or extended replacement cost endorsement.
• Master policy coverage of at least 100% of estimated replacement cost value, with annual servicer verification from 1 January 2027.
• Unit-owner policies are required where a per-unit deductible exists, with the owner's own deductible capped at 5% of the coverage amount or $2,500.

1. Freddie Mac Guide Bulletin 2026-C, 18 March 2026 — $50,000 per-unit deductible cap, ACV roofs, inflation guard retired ↩
2. Michigan DIFS Bulletin 2024-26-INS, Depreciation of Nontangible Items, 8 November 2024 ↩
3. Michigan DIFS 2026 bulletin index ↩