In my 25+ years of helping clients across Hamilton County and Boone County buy and sell homes, I've seen lending rules shift many times. Some changes are minor adjustments. Others are the kind that make you stop and pay attention. The changes coming in 2026 for condo financing are some of the most significant in recent years, and they will affect anyone who owns a condo or is thinking about buying one.

Here's what I'm telling my clients right now.

Streamlined Reviews Are Disappearing

One of the biggest changes comes from Fannie Mae and Freddie Mac. Starting August 3, 2026, the fast-track loan approval process for condos — known as Limited or Streamlined Review — is going away for most buildings. Going forward, condo projects will need to go through a Full Review instead.

What does that mean for you? More paperwork. Longer timelines. Lenders will need full documentation about the association's finances, insurance, and ownership structure before they can approve a loan. If you're buying a condo, plan ahead and build extra time into your closing timeline.

My advice: as soon as you find a condo you're interested in, let me know. I'll help you start gathering the information your lender will need so nothing catches you by surprise at the last minute.

Reserve Fund Requirements Are Increasing

Here's another one that matters a lot for condo associations. Currently, Fannie Mae requires that condo associations put at least 10% of their annual budget into reserve funds. Starting January 4, 2027, that threshold jumps to 15%.

Buildings that don't meet the new requirement will lose their "warrantable" status. That means buyers in those buildings will be limited to non-conventional loans — think cash, portfolio loans, or hard money — which dramatically shrinks the pool of qualified buyers.

Susan's tip: If you serve on your condo board, now is the time to have this conversation. Review your budget, look at your reserve contributions, and start planning. If you're a buyer, I'll help you check this early in your search so you don't fall in love with a building that limits your financing options.

Insurance Deductible Caps

Starting July 1, 2026, Fannie Mae is enforcing a new $50,000 per-unit cap on master policy insurance deductibles. This is a rule designed to protect individual unit owners from being on the hook for excessive association deductibles after a claim.

At the same time, requirements around roof replacement costs are easing slightly, which could help some associations manage their overall insurance expenses. It's a mixed bag, but on balance these changes give associations more flexibility in how they structure their coverage.

If you're on a condo board, talk to your insurance agent about whether your current policy meets the new deductible caps. A policy that doesn't comply could affect your building's financing eligibility.

Susan's Advice for Sellers

If you're planning to sell your condo in 2026 or 2027, the most important thing you can do is get ahead of these changes. Talk to your association board or property manager and ask about the building's financial health.

Does the association meet the 10% reserve requirement now? Are they planning for 15%?
Is the master insurance policy compliant with the new deductible caps?
Has the building gone through a Full Review recently?

A financially healthy building sells faster and attracts more buyers. These are the questions I help my sellers answer before we ever put a sign in the ground.

Susan's Advice for Buyers

For buyers, the rule is simple: check the building's financial health before you make an offer. This is one of the first things I help my clients evaluate, and it can save you from watching a deal fall apart weeks into the process.

Here's what I recommend:

Ask for the association's most recent budget and reserve study upfront.
Request a copy of the master insurance policy to review deductible amounts.
Work with a lender who understands condo financing — not every loan officer knows the new rules.

Condos can be a wonderful option, especially for downsizers looking for maintenance-free living in communities like The Wellings of Carmel or the 55+ communities in Westfield and Zionsville. But the financing landscape is changing, and having the right guidance makes all the difference.

A Final Word From Susan

These changes aren't meant to scare you — they're meant to create stronger, more sustainable communities with healthy reserves and proper insurance coverage. That's good for everyone in the long run.

But navigating these rules takes planning. It takes someone who knows the questions to ask before they become problems. If you have questions about a condo you own, or one you're considering, I'm here to help. Whether you're buying your first condo or downsizing after raising a family here, I will walk you through every step.

Call or text me anytime at 317-777-9146. Let's talk about your goals and make a plan that works for you.

Ready to get started? Schedule a free buyer consultation and we'll talk through what these changes mean for your specific situation.

2026 Condo Financing Changes: A Guide from Your Hamilton County Real Estate Expert