Named-storm coverage is now required for condo financing, and per-unit deductibles are capped at $50,000
Named-storm coverage is now required for condo financing, and per-unit deductibles are capped at $50,000
2026-09-15 · Mississippi · Compliance
A Mississippi Gulf Coast condominium master policy that excludes named storms can now render every unit in the building ineligible for a conventional mortgage. The March 18, 2026 Fannie Mae and Freddie Mac project-standards package made named-storm coverage a required component of windstorm coverage, and capped master-policy per-unit deductibles at $50,000. Both apply to applications received on or after July 1, 2026 — already in force.1
The operative sentence
Freddie Mac's bulletin states it plainly: “Named storms designated by the U.S. National Weather Service or the National Oceanic and Atmospheric Administration by a name or number are a required component of windstorm coverage.”
The deductible rules sit alongside it. A master policy's per-occurrence deductible “may not exceed 5% of the limit maintained for building(s) coverage per occurrence.” A master policy's per-unit deductible “may not exceed $50,000 per unit” — replacing the previous 5%-per-unit formula.
Why this is a Mississippi problem specifically
In Harrison, Hancock and Jackson counties, standard carriers routinely exclude wind and hail from property policies. Coastal condominium associations therefore typically obtain master wind coverage through the Mississippi Windstorm Underwriting Association — the windpool — or through a layered arrangement that carves named-storm exposure out of the primary policy.
A structure that carves named storms into a separate layer is exactly what this rule is written to catch. The question is no longer whether the building is insured for wind; it is whether the windstorm coverage the GSEs are looking at includes named storms.
The deductible arithmetic on the Coast
This is where the $50,000 cap becomes acute. Named-storm deductibles on the Gulf Coast are conventionally written as a percentage of building value, not a dollar figure.
A 5% named-storm deductible on a $10 million building is $500,000. If that deductible is structured per unit, it is ten times the new cap. If it is structured per occurrence, 5% is exactly at the per-occurrence ceiling — which means there is no headroom, and any carrier moving to 6% or 7% pushes the building out of compliance.
The bulletin supplies the fix, and it is the most actionable sentence in the whole package: deductible buy-back policies are expressly permitted to meet the deductible requirements under Guide Chapter 4703. A buy-back layer that reduces the effective deductible to the GSE ceiling brings the building back into eligibility without renegotiating the primary policy.
What else moved in the insurance section
Two changes are relief rather than burden, and they matter to boards because they affect premium:
The inflation guard endorsement requirement is retired in its entirety. It was a standing line item on master policies that no longer has to be there.
Roofs must be insured but need not be on a replacement-cost basis. Actual cash value is acceptable. On an older Coast building with an aging roof, the difference between ACV and RCV pricing is material.
FHFA framed the overall package as removing requirements “that will reduce costs.”2 For a Mississippi coastal association, that framing holds for the inflation-guard and roof-valuation changes and does not hold for named storms and the deductible cap, which tighten.
The unit owner's HO-6 policy is now conditional, not optional
An HO-6 unit-owner policy is required whenever the master policy does not cover the unit interior or carries a per-unit deductible. Its deductible cannot exceed the greater of 5% of the coverage limit or $2,500.
That second trigger is the one associations miss. A master policy written with a per-unit deductible makes an HO-6 mandatory for financing purposes across the whole building, whatever the declaration says about interior coverage.
The upshot for a coastal board
Read the declarations page against the named-storm sentence. Not the summary, not the certificate of insurance — the policy form, looking for how named storms are treated and whether they sit in the same coverage as other windstorm perils.
Find out whether the deductible is per occurrence or per unit. They are governed by two different ceilings and the per-unit one is a hard dollar figure.
Price a deductible buy-back before renewal. It is the sanctioned route and it is cheaper to arrange at renewal than after a sale has fallen through.
Tell owners what the HO-6 requirement is. Unit owners discovering it at closing is how a compliant building still loses a sale.
What to watch next
Servicer annual verification of coverage starts January 1, 2027. From that date the master policy's compliance is checked on a recurring basis rather than only when a unit changes hands — which means a mid-term carrier change that alters the deductible structure surfaces sooner.
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