CondoTek Newsletter -Aug 3, 2026

Biggest Fannie Mae Change, Limited Review GONE, FHFA Pushback

The Biggest Change in Condo Lending in Over a Decade

August 3, 2026 represents one of the most significant shifts in condominium lending since the post-Surfside reforms reshaped project eligibility.

With Fannie Mae eliminating Limited Review and Freddie Mac retiring Streamlined Review, lenders are entering a new era where nearly every condominium transaction requires a more comprehensive evaluation of the project itself—not just the borrower.

The days of relying on simplified review paths for many conventional loans are over.

These changes extend far beyond underwriting. Borrowers should expect additional documentation requests, longer project review timelines, and greater scrutiny of association finances, reserve funding, insurance coverage, deferred maintenance, and critical repairs.

Loan officers will need to set realistic expectations with borrowers, condo teams will likely experience increased workloads, and associations may receive more frequent document requests as lenders gather the information necessary to determine project eligibility.

While the transition may feel challenging, it also presents an opportunity for lenders to modernize their condo lending process. Organizations that establish efficient document collection workflows, educate their production teams, and proactively communicate with borrowers will be best positioned to minimize delays and maintain a competitive advantage.

As with every major industry change, preparation—not reaction—will determine who navigates this transition successfully.

Click HERE to watch the recent webinar CondoTek completed with Fannie Mae.

FHFA Receives Major Pushback on New Condo Lending Rules

Just weeks before the new condominium lending requirements took effect, several leading housing and mortgage industry organizations urged the Federal Housing Finance Agency (FHFA) to delay implementation.

In a joint letter, the groups acknowledged the importance of strengthening condominium lending standards but warned that lenders, homeowners’ associations, management companies, and industry vendors had not received sufficient operational guidance to implement the changes consistently.

One of the primary concerns centered around interpretation. While the agencies outlined what information must now be considered during a project review, many industry participants questioned how certain requirements should be applied in real-world lending scenarios.

Without additional clarification, lenders risk inconsistent underwriting decisions, increased loan repurchase exposure, longer processing times, and confusion among borrowers and association managers alike.

Although the requested delay was ultimately not granted, the industry’s concerns highlight an important reality: education will be critical over the coming months.

Many lending organizations are actively updating policies, retraining staff, and refining their condominium review procedures as they work through the new requirements. Expect additional agency FAQs, lender overlays, and evolving best practices as the industry gains experience with these sweeping changes.

Click the “Watch Video” on the CondoTek website for the latest Fannie Mae video that explains many of these changes, and includes comments from one of CondoTek’s own leaders, Orest Tomaselli.

Limited Review Has Been Eliminated. Here’s How to Prepare Your Lending Team.

With Limited Review officially retired by Fannie Mae and Streamlined Review eliminated by Freddie Mac, lenders should expect a more documentation-intensive condominium lending process. While every organization will adapt differently, the institutions that prepare now will experience fewer surprises, smoother closings, and fewer last-minute project eligibility issues.

Here are five steps every lender should consider taking:

  1. Update your internal condo lending procedures.
    Review your underwriting and operations workflows to ensure they align with the new Full Review requirements. Teams should understand which projects now require a more comprehensive analysis and what documentation is needed.
  2. Start requesting condo documents earlier.
    Because more information is required to determine project eligibility, waiting until late in the loan process can significantly delay closing. Initiating condo document collection as early as possible gives your team more time to resolve missing information.
  3. Prepare borrowers for additional timelines.
    Many borrowers have never experienced a Full Review. Setting expectations upfront about documentation requirements and review timelines can reduce frustration and improve the customer experience.
  4. Educate your production and underwriting teams.
    Loan officers, processors, underwriters, and condo specialists should all understand the operational impact of the new guidelines. Consistent communication across departments helps prevent rework and unnecessary delays.
  5. Evaluate your condo document collection process.
    As project reviews become more comprehensive, efficient document collection becomes even more important. Assess whether your current process provides the visibility, speed, and completeness needed to support the new lending environment.

The transition away from Limited Review represents one of the biggest operational changes condominium lenders have faced in years. Organizations that proactively adjust their processes today will be better positioned to deliver a smoother borrower experience, reduce loan cycle times, and maintain confidence in their condo lending operations as the industry adapts to the new requirements.

We also recommend you consider CondoTek to help with your document collection–it’s all we do. See the website page, “Why CondoTek” so see the difference.