Fannie Mae Condo Guidelines: Full Review & Eligibility

Fannie Mae Condo Guidelines - Factors Impacting Your Review Type

The review path depends on the project classification and current agency requirements. Full Review, an applicable review waiver, and Fannie Mae project approval are distinct paths. The former Limited Review option should not be offered for a new application after its retirement date.

1. 1 Owner Occupancy Ratio

   Owner occupancy requires context. Fannie Mae removed the former established-project owner-occupancy test for investment-property transactions. New projects still have presale requirements, and other agencies or individual lenders may apply different standards. Do not use one percentage for every condominium loan.

2. 2 Delinquent Homeowners Association (HOA) Dues

   Under Full Review, no more than 15% of the project units may be 60 days or more past due on regular common expense assessments. The lender also checks the limit separately for each special assessment. A larger down payment or a more detailed review does not automatically cure a failing project.

3. 3 Project Litigation

   The lender reviews the complaint, insurance response, expected costs, and effect on the building. Litigation involving safety, structural soundness, habitability, or functional use can make a project ineligible. Some documented minor matters are permitted under the ineligible-project rules; the presence of any lawsuit is not an automatic denial.

4. 4 Adequate Insurance Coverage

   The lender checks master property insurance, applicable liability and flood coverage, and any required unit-owner policy. Obtain the policies, endorsements, deductibles, and coverage documentation early. Current rules allow insured roofs to have a different loss-settlement basis from the rest of the master policy. A per-unit master-policy deductible cannot exceed $50,000, and it triggers individual unit-owner coverage requirements. Coverage must address the applicable peril and meet the required amount. See the master-policy requirements and unit-owner insurance requirements.

5. 5 Reserve Fund Levels

   The lender reviews the HOA budget, financial statements, and reserve funding. Under the current Full Review standard, the replacement-reserve allocation is at least 10% of annual budgeted assessment income, subject to permitted exclusions or an acceptable reserve-study alternative. The standard increases to 15% for applications dated January 4, 2027 or later. When a reserve study supports the alternative, the budget must fund its highest recommended allocation; baseline funding that lets cash approach zero is no longer acceptable for this purpose. Read the Full Review reserve requirements.

6. 6 Developer Control

   Developer control, completion, conveyed units, and future phases help determine whether a project is new or established. The lender applies the appropriate category and examines the governing documents. A building being occupied does not, by itself, establish the project's review category.

7. 7 Special Assessments

   For a special assessment, obtain its purpose, amount, payment schedule, collection status, and related repair documentation. A funded assessment does not necessarily resolve a safety or structural problem. The lender needs to understand both the financial obligation and whether the underlying work has been completed.

New and Established Condo Projects

Fannie Mae classifies an established condo project using conveyed units, completed construction, future phasing, and turnover of association control. The general definition requires at least 90% of units conveyed, 100% completion, no additional phasing or annexation, and owner control of the HOA. A defined exception exists for certain developer-held rentals. Review the project classification rules.

A new or newly converted condo project can require additional documents even when the individual unit looks finished. Condo and co-op projects also have different ownership structures. The lender should classify the actual project before choosing the review path.

When Is a Waiver of Project Review Available?

For small projects, the current waiver covers units in two- to four-unit projects and qualifying five- to ten-unit projects. A five- to ten-unit project must not be part of a larger development or master association. The waiver does not eliminate applicable insurance, property, or loan requirements. See Fannie Mae's waiver of project review requirements.

Detached condos, eligible PUD properties, and specified Fannie Mae-to-Fannie Mae limited cash-out refinances have separate waiver provisions. Manufactured-home projects have additional restrictions. Even with a waiver, the lender must check the applicable insurance, property and loan requirements, and an Unavailable CPM status prevents delivery.

Fannie Mae and Freddie Mac Condo Guidelines

Fannie Mae and Freddie Mac publish separate project standards. Ask which agency or investor will purchase the proposed mortgage and which rules the lender is using. A prior Freddie Mac condo loan does not automatically establish eligibility for purchase by Fannie Mae, and the reverse should not be assumed.

The lender also reviews the borrower, condo unit, appraisal, and transaction. Project eligibility is one part of mortgage eligibility, so a project described as Approved by Fannie Mae does not guarantee that every buyer or loan qualifies.

Full Review, Former Limited Review, and Current Approval Paths

Older condo guides often compare Full Review with Limited Review as two current alternatives. That comparison is now historical for new Fannie Mae applications. Start with the lender's current classification and review requirements, then confirm which documents are needed for your transaction.

Full Condo Project Review

Full Review evaluates the applicable project requirements and supporting documents. It is not an approval route for an otherwise ineligible condo hotel, a guarantee of non-warrantable condo financing, or an FHA, VA, or USDA approval. Those loan channels have their own rules.

For eligible projects, the lender uses Fannie Mae's Condo Project Manager, or CPM, as required and documents its certification. The lender remains responsible for the information entered, the supporting records, insurance compliance, and the individual loan. Read the current Full Review process.

Limited Review: Retired for New Applications

Limited Review was a streamlined review method for certain established condo transactions. Fannie Mae requires its retirement for loan applications dated August 3, 2026 or later. A lower loan-to-value ratio no longer makes that retired review method available for a new application.

If a seller, association, or older checklist describes a building as “Limited Review approved,” ask the lender what current review is required. A past loan closing is useful history, but it does not establish present eligibility or eliminate the need for current project documents.

Choosing the Right Condo Approval Type

Choose a financing path after reviewing both the property and the borrower. Ask the lender to identify the agency or investor, project-review method, outstanding conditions, and any restrictions on investment occupancy. Compare the total cash needed and loan terms only after confirming that the proposed program fits the project.

For additional context, compare conventional mortgages with FHA and VA financing. These programs do not share a single condo-approval standard. If the property is non-warrantable, discuss a specifically eligible alternative with the lender rather than assuming another agency will accept it.

See our warrantable condo mortgage page for the conventional financing route.

Bring the property address, intended occupancy, purchase price, down payment, and available HOA documents to the initial mortgage review. This helps the broker identify the right questions before appraisal fees or other transaction costs are incurred.

Resources for Condo Buyers

Use these resources to estimate ownership costs and prepare for the lender’s review.

• Estimate your payment

  Use the mortgage calculator for principal and interest. Add HOA dues, taxes, insurance, any mortgage insurance, and special assessments to your ownership budget.

• Follow mortgage rates

  The Mortgage Rate Watch newsletter covers market developments. Request a separate quote for your property and loan scenario.

• Prepare the project documents

  Compare condo loan options and follow the project review process. Allow time for the association to supply complete records.

• Understand HomePath listings

  HomePath lists Fannie Mae-owned properties for sale. A listing does not establish mortgage or condo-project eligibility; confirm both with the lender.

Keep copies of the documents you receive and ask which conditions remain unresolved. A written list of open items is more useful than a general statement that a building has financed successfully before.

Eligibility Requirements for Fannie Mae Condos

Condo project eligibility includes the building's physical condition, finances, ownership structure, insurance, and legal characteristics. The following topics are common review points. They are not a complete underwriting checklist, and meeting one test does not cure a problem elsewhere.

Project Eligibility Review Service (PERS)

Yes, Fannie Mae still offers PERS. The Project Eligibility Review Service lets lenders request Fannie Mae project approval. The Florida-specific mandate ended, but PERS itself remains available and is still required for certain project categories. The current PERS requirements identify the required and optional submission paths.

What changed in Florida

On March 18, 2026, Fannie Mae removed the blanket PERS requirement for new and newly converted attached condo projects in Florida. These projects may use lender-delegated Full Review, subject to category-specific requirements.

When PERS still applies

Specified non-gut conversions, manufactured-home arrangements, and limited/shared-equity co-ops require PERS. Other qualifying new, converted, or established condo projects may use it voluntarily. The lender must identify the applicable category.

What PERS does not fix

PERS is not a general exception for condo hotels, unresolved critical repairs, unacceptable litigation, or excessive commercial space. The project must meet the applicable eligibility requirements.

What an approval means

Conditional Approval does not permit loan delivery. The lender must obtain the required final status, check its validity and conditions, and separately verify insurance and the individual mortgage.

Owner-Occupancy Ratio

Separate established-project rules from new-project presales. Do not apply the former 50% established-project investment-property test as a current universal requirement. The proposed loan's occupancy classification and any lender restrictions still matter.

Delinquent Assessment Ratio

Request an aging report showing delinquent units, amounts, and days past due. Full Review uses the 15% limit for units 60 days or more past due on regular assessments and separately for each special assessment. Review the underlying records rather than a vague statement that collections are “good.”

Single Entity Ownership

Current limits depend on project size. For projects with 21 or more units, the standard single-entity limit is 20%. The rule specifies two units for projects with 11 to 20 units and for projects with five to ten units that are part of a master association. The guide includes defined exclusions; the lender must apply the rule to the actual ownership records.

New Construction and Phasing Requirements

New and newly converted projects have additional requirements for completion, legal documents, and sales. Generally, at least 50% of the project or subject legal phase must be conveyed or under contract to principal-residence or second-home purchasers. The lender also checks completion of the relevant project or legal phase and common elements under the new-project requirements.

A useful first document package includes the questionnaire, approved budget, reserve information, assessment aging, master insurance policies, governing documents, and any inspection, repair, litigation, or special-assessment records. The lender may request additional items after reviewing those materials.

Documents That Support Condo Project Eligibility

Project questionnaire

Does the condo project information agree with the supporting documents and current project classification?

Budget and reserve study

Does the association meet the applicable reserve standard and fund the necessary work?

Insurance policies

Do the actual coverage, deductibles, and endorsements meet Fannie Mae insurance requirements?

Assessment aging

How many total units in the project are delinquent, and which regular or special assessment is involved?

Ownership schedule

Do units in the project exceed the applicable single-entity ownership limit after permitted exclusions?

Project legal documents

Are the ownership, use, phasing, and required mortgagee protections documented?

Inspection and repair records

Are there unresolved critical repairs or conditions affecting the individual unit or condominium project?

The lender must determine whether the project meets the applicable project eligibility requirements. A loan intended to be sold to Fannie Mae also needs to meet its separate borrower and transaction rules. Complete documentation makes that decision possible; a questionnaire alone is not a warranty that every requirement has been met.

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Ineligible Condo Features

A project can be ineligible for Fannie Mae financing even when the buyer has strong credit and a substantial down payment. Diagnose the specific issue before comparing alternatives. Some lender programs may consider a property that does not meet agency standards, but availability and conditions vary.

The issues below deserve early attention because they can affect both mortgage eligibility and the buyer's ongoing ownership costs.

High Single-Entity Ownership

Concentrated ownership can exceed the applicable project limit. Ask for a unit-by-unit ownership schedule, including related entities and leased units, rather than assuming separate LLC names represent independent owners. The lender evaluates the ownership structure under the current guide.

Insufficient reserves and unresolved critical repairs are separate concerns. A budget percentage does not prove that needed structural work is complete. Review inspection findings, repair scope, funding, completion evidence, and the association's remaining obligations.

Excessive Commercial Space

Fannie Mae generally limits commercial or mixed-use space to 35% of the condo project or the building containing it, using the guide’s measurement rules. Above- and below-grade space counts. Hotel operations are a separate eligibility issue, and projects in special flood hazard areas may need additional flood coverage when commercial space exceeds 25%. See the commercial-space requirements.

Incomplete Legal Phasing

The lender must evaluate the subject project or legal phase under the applicable completion requirements. A finished unit in an unfinished development is not enough to establish eligibility. Ask which phase includes the unit and which common elements and facilities serve it.

Ongoing Litigation

A pending lawsuit needs a documented review of its nature, insurance coverage, financial exposure, and effect on the property. Some minor matters can qualify under specified exceptions. Unresolved structural or habitability issues cannot be dismissed simply because the association expects an insurance recovery.

Non-Warrantable Condos

Non-warrantable condo financing is a lender-specific alternative for certain properties outside agency requirements. It may involve different pricing, equity, reserve, documentation, or occupancy conditions. Ask whether the lender accepts the exact issue affecting your building; the label “non-warrantable” is not an approval.

FHA, VA, and other financing channels apply their own eligibility standards. They should not be presented as automatic workarounds for a Fannie Mae project denial. A mortgage broker can help compare documented options after the project issue is understood.

Before You Commit to a Condo Purchase

Before committing to a closing date, ask the lender for the project-review method, the outstanding documents, and any unresolved conditions. Build an ownership budget that includes association dues, insurance, taxes, and assessments.

Bennett Capital Partners can help you organize the initial property information and discuss the financing paths that may fit. Review the project conditions alongside your credit, income, assets, intended occupancy, and purchase contract.

Frequently Asked Questions (FAQs)

Can I get a mortgage for a non-warrantable condo through Bennett Capital Partners?

A non-warrantable condo does not meet one or more applicable agency project standards. Some lenders offer alternative financing for selected issues, but acceptance, down payment, reserves, and pricing vary. Obtain a review of the specific building before relying on an advertised program.

How do I know if a condo qualifies for Fannie Mae financing?

Fannie Mae sets requirements for mortgages it purchases or guarantees. The lender evaluates the condominium project, unit, and borrower and documents the applicable review. A past closing in the building or a borrower preapproval does not establish current project eligibility.

Are FHA, VA, and USDA mortgages available for condominium purchases?

FHA, VA, and USDA financing use separate program and property rules. Fannie Mae approval does not establish approval for those programs, and an agency loan is not an automatic solution for a project defect. Ask the lender which program requirements apply.

What is the difference between a full review and a limited review for condo approvals?

Full Review evaluates the applicable project requirements and supporting records. Limited Review was a streamlined alternative for certain transactions, but Fannie Mae retired it for applications dated August 3, 2026 or later. A new application must use a currently permitted review path.

How can I find out more about financing options for condominium purchases through Bennett Capital Partners?

Contact Bennett Capital Partners with the condo address, purchase or refinance purpose, intended occupancy, price or estimated value, and available association documents. We can help identify potential lender options and the documents needed for review.

What is an FHA Single Unit Approval, and why is it necessary?

FHA Single-Unit Approval can provide a path for an eligible unit in a condominium project that is not FHA-approved. It has its own unit, project, and loan conditions. It is not required for every FHA condo transaction and does not replace Fannie Mae project review for a conventional loan.