What the lender is now testing, and the number that decides it

Full Review means a lender-delegated review of the association's budget, reserves, insurance, delinquencies, litigation, special assessments and inspection reports. Two figures matter most.

The reserve line. The Selling Guide requires a budget that “provides for the funding of replacement reserves for capital expenditures and deferred maintenance that is at least 10% of the budget,” computed by dividing “the annual budgeted replacement reserve allocation by the association's annual budgeted assessment income (which includes regular common expense fees).”³

The delinquency ceiling. “No more than 15% of the total units in a project are 60 days or more past due on common expense assessments,” and the same 15% ceiling applies separately to each special assessment.

A reserve study can substitute for the 10% calculation, but the Guide closes the obvious workaround in terms: the study must “demonstrate[] that the project has adequate funded reserves that provide financial protection for the project equivalent to Fannie Mae's standard reserve requirements,” the budget “must include the highest recommended reserve allocation amount,” the study must have been “completed within three years” — and then:

“Although reserve studies may establish a reserve funding goal … often referred to as the baseline funding method), this method may not be used to waive the 10% reserve requirement.”

That sentence matters in New York, because baseline funding is what a cheap reserve study produces. A board that commissioned a study to avoid the reserve line may have bought a document that cannot do the job.

A 15% requirement has been widely reported as arriving for loan applications dated on or after January 4, 2027. We are reporting that as reported: the operative number in the Selling Guide today is 10%, and we could not verify the 15% figure or the January date in a primary document, because Fannie Mae's Lender Letter site is not reachable from this environment. Do not treat 15% as current law. Do treat it as the figure a board adopting its 2027 budget this autumn should be planning against, because that is the budget a January 2027 buyer's lender will test.

The New York collision nobody is describing

This is the part that deserves a board's full attention, and it is specific to New York City.

Selling Guide B4-2.1-03, “Ineligible Projects,” effective August 5, 2026, makes a project ineligible where it needs critical repairs, shows advanced physical deterioration, is subject to an evacuation order, or has failed a mandatory jurisdictional inspection related to structural safety — and where there are “unfunded repairs costing more than $10,000 per unit” anticipated within twelve months, excluding repairs funded by owners or by a special assessment.⁴

A New York City facade filing under Local Law 11 is a mandatory jurisdictional inspection related to structural safety. A parapet finding, a parking-structure assessment, a Local Law 97 penalty with no capital behind it — these are precisely the “required regulatory action” and unfunded-repair fact patterns the Guide is written around.

Work the arithmetic. A sixty-unit Queens co-op facing a $900,000 facade and parapet job that is neither funded nor specially assessed is at $15,000 per unit. Over the line. Not for that owner's loan — for the building.

And there is an escape hatch stated in the rule's own words: repairs funded by owners or by a special assessment are excluded from the $10,000 test. Which means adopting a funded special assessment can itself cure the ineligibility, provided the underlying critical repair is actually remediated. For a board choosing between deferring a facade job and assessing for it, that is a financing argument, not just a safety one. Our condo safety inspections, reserve studies and assessment limits pages cover the three sides of that decision.

Co-ops are on a separate clock, and one test catches New York practice

Selling Guide B4-2.3-02, “Co-op Project Eligibility,” carries an effective date of May 6, 2026 — it was not swept into the August 5 project-standards rewrite. Co-op and condominium standards are now on different revision clocks, which matters for a New York reader who will assume “the Fannie condo changes” apply identically.⁵

Three points for a New York co-op board. First, there is no waiver path for co-ops — the unit-count waivers in B4-2.1-02 are condominium and PUD provisions, so even a small co-op faces Full Review. Second, the financial tests are co-op-specific and one of them catches a common New York practice:

“If there is any negative cash flow for the present year, it may not exceed 5% of the co-op project's most recent audited financial statement and may not have two consecutive years' operating loss”

Two consecutive years of operating loss. New York co-ops have absorbed facade and emissions costs by running deliberate deficits for years, and that has been unpunished. Third, the blanket mortgage “may be a balloon mortgage” — permitted, but a board planning to refinance the underlying mortgage to fund capital work should understand that the refinancing strategy no longer substitutes for a funded reserve line.

The insurance changes: relief, and a new hard ceiling

FHFA announced the insurance side on March 18, 2026, framing it as cost relief: “New rules for Fannie Mae and Freddie Mac mortgages will help to lower home insurance bills for millions of families, especially in rural areas and condo buildings.”⁶

The relief is real. Selling Guide B7-3-03 now provides that “Roofs must be insured, but do not have to be insured on a replacement cost basis,” and that Fannie Mae “recognizes that some insurers may issue policies that provide coverage on an actual cash value basis for personal property and certain property elements.” The inflation-guard endorsement requirement is retired.

And then the ceiling, from the same topic:

“The maximum allowable per unit deductible for all required property insurance perils covered by a master property insurance policy is $50,000 per unit.”

This is the trap of the year for a New York board. New York associations have been managing a brutal hard market precisely by buying very high deductibles. A master policy with a per-unit deductible above $50,000 makes the project non-warrantable. A board renewing this autumn can save money on the premium and destroy its own building's financeability in the same signature.

There is a second-order cost too: Fannie requires a unit owner's HO-6 policy to be at least equal to the master policy's per-unit deductible where one exists. So a high master deductible pushes cost onto every shareholder and unit owner individually. Our New York insurance requirements page covers what coverage an association carries.

One favourable change, and it lands hardest in New York

Freddie Mac moved on the same timetable, retiring Streamlined Review for established projects and — the genuinely good news — eliminating the 50% investor-concentration cap for established projects on Full Review. That matters disproportionately in New York, where sponsor-retained and investor-held units are endemic in converted co-ops and condominiums. Many older New York City buildings have long carried sponsor holdings above 50% and were non-warrantable on that ground alone. Removing the cap should bring some of them back into conventional financing even as the reserve and repair tests get harder.

We could not verify Freddie Mac's Bulletin 2026-C text or Guide sections in primary form — its Guide site is a JavaScript application that returns nothing to a fetch — so the bulletin number, the August 3 date and the investor-cap elimination are secondary-sourced here. The practical point stands: alignment means a New York board cannot shop for a friendlier agency. Full Review is the floor at both.

The list nobody can see

A project with an “Unavailable” status in Fannie Mae's Condo Project Manager cannot be delivered, and even a waived review requires the lender to confirm the project is not on it. The list is not published. Fannie's Condo Status Finder checks one project at a time.

Reporting from a New York firm, quoting CondoTek data, puts the New York City count at “39 condo and co-op NYC buildings on this list,” with the usual triggers being failure to hit the reserve line, insurance non-compliance, structural or mechanical repair violations, and investor concentration. That article carried no publication date, so treat the figure as undated. The actionable point is simply that a New York board can and should ask its managing agent to check the building's status rather than discovering it from a failed closing.