Condo rules: what changed Aug. 3, what changes Jan. 4 and what the price data can’t say

On March 18, 2026, Fannie Mae issued Lender Letter LL-2026-03 and Freddie Mac issued Guide Bulletin 2026-C. Fannie Mae says its changes are aligned with Freddie Mac and coordinated with FHFA.^1,2 Freddie Mac uses different names for the same steps: Streamlined Review where Fannie Mae says Limited Review, and Exempt From Review where Fannie Mae says Waiver of Project Review.²

Fannie Mae gives this reason for the reserve changes:

The letter adds that unit owners can face special assessments or higher dues “leading to mortgage default or foreclosure.”¹

The dates attach to the application, so two loans in one building can fall under different rules. Freddie Mac also says a Seller with an unexpired project review completed before the effective dates must still confirm that the project complies for applications received on or after them.²

Under Full Review, the lender reads the association’s budget and checks the allocation for capital expenditures and deferred maintenance. The minimum moves from 10% to 15% of annual budgeted assessment income.¹ Fannie Mae’s Selling Guide, dated Aug. 5, still shows 10%, because Fannie Mae said the new reserve standard would not enter the guide until after Jan. 4.^3,4

The guide lets a lender “use a reserve study in lieu of calculating the replacement reserve,” provided the study was completed within three years of project approval.⁴ Since Aug. 3 the budget must also include the study’s highest recommended allocation, and baseline funding no longer counts.¹ Freddie Mac’s FAQ says Sellers may rely on a reserve study instead of the budget percentage, and may submit a Project Waiver Request for established projects.⁵ The letter says other reserve requirements are unchanged, so we read the study path as continuing after Jan. 4. Fannie Mae has not yet published the revised guide text.

With every other budget line held fixed, a project that allocates exactly 10% today needs assessment income about 5.88% higher to reach 15%. At the $449 median we found on 2026 Dallas County condo listings, that is $26.41 a month. Use your own numbers below.¹⁵

ICE data given to CNN show condo prices down 1.1% from a year earlier in mid-October and single-family prices up 1.5%. Condos lagged in 99 of the 100 largest markets, and fell at least 3% in more than a quarter of them.⁶ Cotality’s attached category includes townhomes.⁷ NAR’s measure is a median sale price, which moves with the mix of homes sold, and it shows both categories up 1.2%.⁸

NAR counted condo and co-op sales at an annual rate of 350,000 in September, down 5.4% from a year earlier.⁸ Its condo months’ supply averaged 3.5 in 2023, 4.8 in 2024 and 5.8 in 2025.⁹

The longer view uses Zillow’s home value index. In December 2019 the typical condo was valued at 1.041 times the typical single-family home. By September 2026 the ratio was 0.937. The U.S. condo series peaked in May 2024 and sits 2.1% below that level.¹⁰

Raleigh, NC (-7.6%), Tampa, FL (-6.9%), Las Vegas, NV (-6.5%) had the steepest year-over-year falls in this series. Dallas shows condos at -5.5% and single-family at -2.1%.¹⁰ Measures differ by metro: ICE has Seattle down nearly 7%,⁶ and Zillow has it at -4.3%.

Measured from each metro’s own condo peak, 30 of the 100 largest metros sit at least 10% below it, and 4 sit at least 20% below it.¹⁰ Dallas sits 14.1% below.

National indexes cannot show how a condo market behaves at the building level, so we ran one county through the same steps. We used Dallas County MLS sales records from Nov. 3, 2021 to Sept. 30, 2026: 10,940 closed condo sales and 86,890 closed single-family sales.¹⁵

The first method compares price per square foot with controls for zip code, building era, size and bedrooms. From the first half of 2022 to the first half of 2026, condos fell 5.1% and single-family homes fell 0.4%. The second follows the same unit or house across two sales, a smaller sample that drops short holds and most rehabs. It has condos at -1.1% and single-family homes at +7.8%. The gap is about 5 points on the first method and 9 on the second.

At the end of 2022, condos had 2.3 months of supply and single-family homes had 2.8. On Sept. 30, 2026, condos had 10.3 months and single-family homes had 5.4, with 1,501 condo listings active.

The median condo closed at 94.2% of original list price over the last 12 months, against 100.0% in the first nine months of 2022. Single-family homes went from 101.3% to 96.4%.

We assigned each building to a tier by its median sale price in 2021 to 2023, so a later decline cannot move a building into a lower tier. Comparing sales within the same building, price per square foot fell 24.9% in buildings under $150K and 13.8% in buildings at $150K to $250K. It held about flat at $250K to $400K and rose 5.7% at $400K and up.¹⁵

Dues weigh most where prices are lowest. In the lowest tier, the median monthly dues of $338 come to 5.5% of sale price per year. At $400K and up, the higher $749 comes to 1.5%. Cash buyers made 71.2% of recent purchases in the lowest tier. These figures do not establish why prices fell.

Lower-priced homes were weaker on the single-family side as well. With zip and era cells sorted the same way, single-family values fell 6.5% under $250K and rose 10.0% at $700K and up. Those cells group many houses and are less precise than a building, so the two tier tables are not directly comparable.

Across 2,632 pairs of listings for the same unit at least 11 months apart, dues rose a median 5.7% a year. In 28.0% of pairs they rose more than 10% a year, and in 24.5% they did not change. About 47% of listings say dues include insurance. Dues data do not show how much of any increase went to reserves.¹⁵

Cash buyers’ share of condo sales rose from 38.4% in the first quarter of 2022 to 46.6% in the third quarter of 2026. For single-family homes it went from 26.4% to 22.0%. Loans closing soon after Aug. 3 mostly had applications dated before it, so the table below is an early reading and cannot yet test the review change.

All 30 large metros that sit at least 10% below their condo peak reached that peak by May 2024, at least 22 months before the March 2026 letters.¹⁰ Dallas County’s matched index peaked in the second half of 2023 and its repeat-sale index in the first half of 2024.¹⁵ Nationally, 38 of the 100 largest metros reached their condo peak in 2026.

The national condo gap also did not visibly speed up after the letters. Zillow’s condo to single-family ratio fell 0.77 of a percentage point in the six months before them and 0.56 in the six months after. Lenders were not required to apply most of the review changes until Aug. 3, and the 15% minimum has not started, so these figures cannot rule out a later effect.

MLS records do not show a project’s reserve allocation, its review outcome, its Condo Project Manager status, or whether a buyer’s loan was denied because of the project. Cotality links attached-home weakness to HOA fees, special assessments and insurance,⁷ and our Dallas County figures fit that description without proving it.

In a July 8 letter to FHFA Director Bill Pulte and both GSEs, the Community Home Lenders of America, the Community Associations Institute and the National Association of Mortgage Brokers asked for a one-year delay on some restrictions. They also asked for exception processing on lower-risk loans, proportionate standards for critical repairs and repurchases, and alignment with FHA procedures.^11,12 Responding to an earlier request, FHFA said the GSEs were “implementing their new policies on time so that more Americans can afford to buy a home and everyone’s financial security is protected.”¹² We found no FHFA decision on the July letter as of Nov. 2.

The $15 to $30 range sits near the arithmetic in chapter 03 for dues around $250 to $500, for a project at exactly 10%. It says little about projects further below the minimum, or those whose studies call for larger allocations. Fannie Mae’s letter also describes rising premiums and limited insurance availability as a challenge for associations,¹ which is the context for the insurance rollbacks.

Items marked as requirements come from the GSE documents. Suggested checks are ours, drawn from the data above.

For why collateral value matters to how the GSEs price risk, see how Fannie Mae and Freddie Mac make money. Our October GSE update covers Freddie Mac’s condo flood coverage bulletin.