---
title: "New Fannie Mae Condo Rules: What NYC Buyers Need to Know"
description: "The 15% reserve rule starts 4 January 2027. In New York it reaches condos, not co-ops, and costs the median building about $85 a month."
url: "https://realestaterebatesnewyork.com/guides/fannie-mae-condo-rules-2027-nyc-buyers"
source: "Real Estate Rebate Team"
datePublished: "2026-08-17"
dateModified: "2026-09-03T18:44:12.509Z"
---

# New Fannie Mae Condo Rules: What NYC Buyers and Owners Need to Know for 2027

Condo Financing · By Régis Roumila · August 17, 2026

The 15 percent reserve rule reaches New York condominiums from 4 January 2027. It does not reach co-ops, and two other provisions in the same rulebook will decide more New York deals than the reserve figure ever will.

![A facade technician on rope access, inspecting the part of the purchase no buyer tours. Photograph courtesy of Tessa Bury, licensed CC BY 4.0 via Wikimedia Commons.](https://realestaterebatesnewyork-bucket.nyc3.cdn.digitaloceanspaces.com/a75efd36-53ca-4511-85e3-1c3546a8c356.jpg)

*A facade technician on rope access, inspecting the part of the purchase no buyer tours. Photograph courtesy of Tessa Bury, licensed CC BY 4.0 via Wikimedia Commons.*

## Two dates, and only one of them has happened

Fannie Mae and Freddie Mac have rewritten the way a lender looks at the building your
apartment sits in. Both changes arrived together in
Fannie
Mae Lender Letter LL-2026-03, published on 18 March 2026, and in
Freddie
Mac Bulletin 2026-C the same day. Most of the coverage has compressed that into one number, 15
percent, and one date in 2027. Both are real. Neither is the part that will decide a New
York deal.

The first date has already passed. On 3 August 2026 Fannie Mae retired the Limited
Review, the shorter path that let a lender approve a loan in an established condominium
on the strength of the borrower and a thin file about the building. It is gone from the Selling
Guide entirely.
The section that used to be numbered B4-2.2-02 is now
B4-2.2-01,
Full Review Process, and the phrase "Limited Review" no longer appears anywhere on the
page.

The same change also retired the 50 percent investment-property concentration cap in established
projects and widened the review waiver from four units to ten. Both of those make
financing easier, not harder, and almost nobody has written them up.

The second date has not arrived. From 4 January 2027, a condominium going through Full
Review must budget at least 15 percent of its annual assessment income to replacement
reserves, up from 10 percent. The trigger is the date on the loan application, not the
closing. As of today the Selling Guide still prints 10 percent, because 10 percent is still the
rule.

### How the change actually arrives

1. Announced: **Lender Letter LL-2026-03** (March 18, 2026)
   Fannie Mae published the whole package at once. Freddie Mac matched it the same day in Bulletin 2026-C.
2. Insurance: **Deductible caps take effect** (July 1, 2026)
   A master policy per-unit deductible is capped at $50,000, and a unit owner's own policy deductible at 5 percent of coverage or $2,500.
3. In force: **Limited Review retired** (August 3, 2026) [Important]
   Established condominium projects that used to qualify now go through Full Review, or a waiver where one applies. The review waiver widened from four units to ten on the same day.
4. Published: **The Selling Guide catches up** (August 5, 2026)
   Announcement SEL-2026-07 rewrote Chapter B4-2. Full Review is now B4-2.2-01 and the commercial space limit reads 35 percent.
5. Ahead: **The reserve allocation goes to 15 percent** (January 4, 2027) [Important]
   Applies to loan applications dated on or after that day, for condominium projects going through Full Review.

**The reserve figure is the last thing to land, and it lands on applications rather than closings. Everything before it is already in force.**

### Three numbers get quoted. Only two of them mean anything

The 15 percent is a test on the budget, not on the bank balance. That distinction is the single most common misreading of this rule, and it cuts both ways.

- **15 percent of the building’s value or assets — Not the rule** (Do not use this value): Nothing in the guideline requires a reserve account equal to a share of what the building is worth. This reading turns a manageable budget line into a number no association could reach.
  Appears constantly in secondary coverage. It is not in the text.
- **15 percent of annual budgeted assessment income — The actual test** (Use this value): The lender divides the budgeted replacement-reserve allocation by the association's annual budgeted assessment income. Incidental income, pass-through utility charges and special assessment income can be excluded from the calculation.
  From loan applications dated 4 January 2027 or later.
- **Percent funded against the reserve study — The question that matters** (Use this value): This is what tells you whether the money will be there when the facade job comes due. A building can allocate 15 percent of a small operating budget and still sit at a fraction of what its own study recommends.
  Not a Fannie Mae test at the percentage level, which is exactly why you have to ask for it yourself.

**A building can pass the 15 percent test and still be badly underfunded. Ask what percentage of the reserve study it has actually funded.**

*Source: Fannie Mae Selling Guide B4-2.2-01, Full Review Process*

## What five percentage points actually costs

Work the arithmetic rather than the adjective. Take a building sitting exactly at 10 percent
today. Hold every other line of its budget constant in dollars, so 90 percent of current income
is committed elsewhere. To get the reserve line to 15 percent of the new, larger income, that
income has to rise by a factor of 0.90 divided by 0.85.

That is 5.88 percent. Not 5 percent, and not 50. A 5.9 percent rise in common
charges buys a 58.8 percent rise in the dollars going into reserves, which is the
whole point of the change and the reason the arithmetic is worth doing rather than skipping.

The median active condominium listing in New York City carries a monthly common charge of
$1,442. Applied to that, the ceiling is about $85 a month. In Manhattan, where the
median is $1,858, it is about $109. In Brooklyn, where the median is $734, it is
about $43.

Three caveats, because the number above is a ceiling rather than a forecast. It assumes the
building is at exactly 10 percent today, which most well-run New York buildings are not. It
assumes the whole gap is closed by raising charges rather than by moving money between budget
lines. And it applies only to buildings going through Full Review that are relying on the
percentage rather than a reserve study.

Source: Monthly charges are the median of active for-sale listings in the
five boroughs on our RLS feed as at 17 August 2026, n=3,582 condominium listings with a stated
monthly charge. The multiplier is derived from the reserve test in
Selling
Guide B4-2.2-01.

### The ceiling on the increase, at New York’s median monthly charge

The most a monthly charge can rise if a building at exactly 10 percent funds the entire gap by raising charges and changes nothing else.

| Segment | Listings | Median charge | Ceiling | Per year |
| --- | --- | --- | --- | --- |
| NYC condominiums | 3,582 | $1,442/mo | $85/mo | $1,018 |
| Manhattan condominiums | 2,628 | $1,858/mo | $109/mo | $1,312 |
| Brooklyn condominiums | 616 | $734/mo | $43/mo | $518 |
| Queens condominiums | 338 | $589/mo | $35/mo | $416 |
| Manhattan condops | 114 | $3,097/mo | $182/mo | $2,187 |

**At the median Manhattan condominium charge the whole change is worth about $1,312 a year. That is real money and it is not a crisis.**

*Source: RLS active listings, 17 August 2026; Fannie Mae Selling Guide B4-2.2-01 — Medians are taken across active for-sale listings carrying a stated monthly charge. The ceiling is 5.88 percent of the median, the multiplier a building would need if it sat at exactly 10 percent and funded the whole gap from an increase. Most buildings will pay less than this and some will pay nothing.*

## Nearly nine in ten New York condo listings are in buildings too big for the waiver

Fannie Mae widened the project review waiver on 3 August. Under
B4-2.1-02,
Waiver of Project Review, a unit in a two to four apartment condominium is waived outright. A
unit in a five to ten apartment condominium is waived too, as long as the project is not part of a
larger development or a master association. Above ten apartments, there is no waiver and the Full
Review applies.

So the question for any given New York apartment is simply how many homes are in the building.
We matched every active condominium listing in the five boroughs to its building's tax lot and
took the residential unit count from the City's
PLUTO
file. Of the 3,178 listings we could match, 10.5 percent sit in buildings of two to ten
apartments and 88.9 percent sit in buildings of eleven or more.

That is the headline, and the borough split underneath it is more interesting than the
headline.

### Active NYC condo listings by the size of the building they sit in

Residential apartment count on the building’s tax lot, from the City’s PLUTO file. The waiver reaches the two bars at the top.

| Category | Active condominium listings |
| --- | --- |
| 1 apartment | 21 |
| 2 to 4 | 73 |
| 5 to 10 | 260 |
| 11 to 50 | 669 |
| 51 to 200 | 1,350 |
| Over 200 | 805 |

**333 listings sit in buildings small enough for the waiver. 2,824 do not, and those go through the Full Review that the 15 percent test lives inside.**

*Source: RLS active listings joined to NYC PLUTO (64uk-42ks), 17 August 2026 — n=3,178 of 3,589 active condominium listings; the remainder had no linked building or no PLUTO match. PLUTO counts apartments on the tax lot, so a multi-building complex on one lot reads as one very large project. That inflates the top bar and does not affect the waiver threshold. We cannot see master associations in this data, so some five to ten apartment projects will fail the waiver on that condition.*

## The waiver is, in practice, a Brooklyn story

![Row of nineteenth-century brick rowhouses on Kane Street in Cobble Hill, Brooklyn, with stoops and arched doorways](https://realestaterebatesnewyork-bucket.nyc3.cdn.digitaloceanspaces.com/3c84abc1-1d56-48cd-9fda-4b6b9c157829.jpg)

*Kane Street in Cobble Hill. Buildings on this scale are where Brooklyn’s small condominiums live, and where the widened waiver actually bites. Photograph courtesy of Beyond My Ken, licensed CC BY-SA 4.0 via Wikimedia Commons.*

Split the same figure by borough and it stops being a national statistic. In Brooklyn,
32.8 percent of active condominium listings sit in buildings of two to ten apartments. In Manhattan
the figure is 5.4 percent. In Queens, 6.6 percent.

Six times the rate. The widened waiver is worth something real to a buyer in
Bushwick,
Williamsburg, Greenpoint or Stuyvesant Heights, where the condominium stock is converted
rowhouses and small new-build infill. It is worth close to nothing to a buyer in Manhattan, where
the median condominium building on our feed has 62 apartments against Brooklyn's 16.

The Brooklyn small-building cohort has its own shape: 188 listings, a median ask of $1,100,000
and a median monthly charge of $546. 143 of those sit in five to ten apartment buildings, where
the waiver carries the master association condition, and 45 sit in two to four apartment
buildings, where it does not.

Source: RLS active listings joined to NYC PLUTO, 17 August 2026.
Manhattan n=2,303, Brooklyn n=573, Queens n=302.

### Where the widened waiver lands

Active condominium listings by borough, and the share sitting in buildings of two to ten apartments.

| Borough | Listings | 2 to 10 units | Share | Median building |
| --- | --- | --- | --- | --- |
| Brooklyn | 573 | 188 | 32.8% | 16 apartments |
| Queens | 302 | 20 | 6.6% | 58 apartments |
| Manhattan | 2,303 | 125 | 5.4% | 62 apartments |
| All three | 3,178 | 333 | 10.5% | 48 apartments |

**A Brooklyn condominium buyer is six times more likely to land in a building that skips the review altogether than a Manhattan one.**

*Source: RLS active listings joined to NYC PLUTO (64uk-42ks), 17 August 2026 — Median building size is the median across distinct buildings with a listing in that borough, not across listings. The Bronx and Staten Island carried too few active condominium listings on this feed to report separately.*

## If you are buying a co-op, this is a different page of the rulebook

Here is where most of the national coverage goes wrong for a New York reader, and it goes
wrong in a way that matters, because co-ops are 38.8 percent of the active condominium, co-op and
condop inventory on our feed. That is 2,358 apartments on the market right now.

Several widely shared write-ups state that Fannie Mae requires "a condo or co-op budget" to
fund reserves at 15 percent. Read the section that actually governs co-op projects and the
percentage is not there.
B4-2.3-02,
Co-op Project Eligibility, updated 5 August 2026, requires
the operating budget and the two most recent years of audited financial statements to be
consistent with the nature of the project, to provide adequate cash flow to service current debt
and operating expenses, and to provide for "adequate replacement and operating reserves".
That is a judgment standard, not a ratio.

What a New York co-op has instead is a set of tests no condominium faces. Negative cash flow
cannot exceed 5 percent of the most recent audited year and cannot run two consecutive years.
Shares representing at least 50 percent of the corporation must have been sold to purchasers who
will live there. The corporation must qualify under Section 216 of the Internal Revenue Code, and
if it does not, Fannie Mae will not buy the share loan at all.

And there is no waiver. The
waiver
table at B4-2.1-02 lists detached condominium units, two to
four apartment condominiums, five to ten apartment condominiums and PUDs. Co-ops appear once, in
a parenthesis, to say the refinance waiver does not apply to them. So a six-apartment co-op
in Brooklyn Heights gets the full co-op review while the six-apartment condominium across the
street gets none. On our feed that asymmetry currently affects 117 active co-op
listings.

One more provision reads as though it was drafted with New York in mind, because in effect it
was. A single entity owning more than 20 percent of the shares makes a co-op ineligible, except
that a sponsor may hold more, provided the excess relates to units subject to statutory rent
regulations that limit the sponsor's ability to sell them. Units held under non-eviction rent
regulation codes are excluded from the single-entity calculation outright. That is a
carve-out for sponsor-held regulated apartments in converted New York buildings, sitting in a
national rulebook.

Source: Fannie Mae Selling Guide
B4-2.3-02,
B4-2.1-02
and B4-2.1-03,
all as published 5 August 2026. Inventory counts are active for-sale listings on our RLS feed in
the five boroughs as at 17 August 2026.

### The same building, two rulebooks

What Fannie Mae asks of a New York condominium and what it asks of a co-operative, side by side.

| Test | Condominium | Co-operative |
| --- | --- | --- |
| Reserve allocation | 15% of assessment income from 4 Jan 2027 | No percentage test |
| Reserve standard | The percentage, or an acceptable reserve study | "Adequate replacement and operating reserves" |
| Review waiver | Yes, 2 to 10 apartments | None, at any size |
| Operating deficit | Budget must be adequate, no ratio stated | Under 5% of the last audited year, never twice running |
| Owner occupancy | Investor concentration cap retired Aug 2026 | 50% of shares sold to principal residents |
| Single-entity ownership | 20% of units in projects of 21 or more | 20% of shares, rent-regulated units carved out |
| Arrears | Under 15% of units 60+ days late | Under 15% of owners 60+ days late |

**The reserve headline is a condominium rule. A co-op buyer should be reading the audited financials and the sponsor position instead.**

*Source: Fannie Mae Selling Guide B4-2.1-02, B4-2.1-03, B4-2.2-01 and B4-2.3-02 — All four sections as published 5 August 2026, incorporating Lender Letter LL-2026-03. Quoted text is Fannie Mae’s. This is a summary of the provisions most likely to matter in New York and not the full eligibility test, which runs to several pages per property type.*

## The two provisions that will decide more New York deals than the reserve figure

![Construction workers erecting a sidewalk shed over the pavement on West 47th Street in Manhattan, with walk-up buildings across the street](https://realestaterebatesnewyork-bucket.nyc3.cdn.digitaloceanspaces.com/567b160f-10c6-4eda-a89c-9e52c7a86156.jpg)

*A sidewalk shed going up on West 47th Street: an unfunded facade obligation, seen from the pavement. Photograph courtesy of Jim Henderson, licensed CC BY-SA 4.0 via Wikimedia Commons.*

If you read only the reserve headline you will miss the two tests most likely to stop a New
York deal, and both of them are in
B4-2.1-03,
Ineligible Projects.

The first is critical repairs. A project is ineligible if it needs repairs that materially
affect safety, soundness, structural integrity or habitability, and the definition includes a
hard number: any unfunded repairs costing more than $10,000 per apartment that should be
carried out within the next twelve months. Repairs funded through a special assessment
that is already within guidelines do not count.

Put that against the
Facade
Inspection Safety Program. A New York building on a five-year FISP
cycle that has just been handed an unsafe report, has not yet raised the money, and has fewer
apartments to spread it across, can cross $10,000 an apartment on a single scaffolding
season. If a structural or mechanical inspection was done within three years, the lender
has to read it. In this city those reports exist, they are filed, and they are dated.

The second is commercial space. No more than 35 percent of the project, or of the building the
project sits in, may be commercial or mixed-use. Two details make that a New York test rather
than a national one. It is measured against the whole building, not just the residential
condominium inside it. And rental apartments and hotel rooms inside the building count as
commercial space, even though nobody would call them commercial. A condominium occupying
the upper floors of a tower whose lower floors are a rental building or a hotel is being measured
on the whole stack.

Worth noting for anyone who has been quoting the older figure: the current Guide says 35
percent. The 20 percent number still circulating in New York trade coverage is out of
date. And
in a Special Flood Hazard Area, commercial space above 25 percent may push the building's flood
cover beyond what the National Flood Insurance Program will carry, which reaches parts of Lower
Manhattan, Two Bridges, Red Hook and the Rockaways.

Source: Fannie Mae Selling Guide
B4-2.1-03,
Ineligible Projects, as published 5 August 2026.

## Condops have their own subsection, and 133 of them are on the market

The condop is close to a New York invention: a condominium whose residential unit is itself a
co-operative, with the commercial units held separately. Fannie Mae gives it its own set of
eligibility requirements inside the co-op section, which is a small sign of how much of this
rulebook is written with this city in view.

A condop has to satisfy everything a co-op does, and then three more things. The co-op has to
account for the majority of the non-common-element square footage in the condominium. It has to
hold the majority of the undivided interest in the common elements. And its board has to
exercise effective control of the condominium board, with voting rights proportional to that
interest. The co-op and the condominium are then assessed together.

There are 133 active condop listings across the five boroughs on our feed, 115
of them in Manhattan, at a median ask of $1,390,000 and a median monthly charge of $2,570. 99.1
percent sit in buildings of eleven or more apartments, so effectively every one of them goes
through a full review of both entities. If you are buying one, ask for both sets of
financials, not one.

Source: Fannie Mae Selling Guide
B4-2.3-02,
Eligibility Requirements for Condop Projects, 5 August 2026. Inventory is active for-sale
listings on our RLS feed as at 17 August 2026, n=133, of which 116 could be matched to a PLUTO
unit count.

## For most of Manhattan this is a jumbo conversation, and that is not an escape

Fannie Mae and Freddie Mac rules govern loans written to be sold to Fannie Mae and Freddie
Mac. The
2026
conforming loan limit for a one-unit property in the five boroughs is $1,209,750,
held at the 2025 figure under the hold-harmless provision. A buyer putting 20 percent down stays
inside that limit up to a purchase price of $1,512,188.

59.9 percent of active Manhattan condominium listings are priced above that line.
The median Manhattan condominium ask is $1,950,000. Citywide the figure is 51.7 percent for
condominiums and 21.5 percent for co-ops, which is a useful reminder that the co-op market
is where the conforming-sized loans actually are.

One New York broker
told
Brick Underground in May that buildings with apartments under $2 million would feel this most.
Our data says that instinct is right and puts a line on it: the Fannie-relevant slice of the
Manhattan condominium market is the 40.1 percent priced at or below $1,512,188.

But sitting above the line is not an exemption, for three reasons. Jumbo and
portfolio lenders
set their own condominium project standards and many of them simply adopt the agency ones, so the
questionnaire lands on the managing agent's desk either way. A building that goes ineligible in
Fannie Mae's Condo Project Manager tends to be treated as a problem by lenders who never intended
to sell the loan, which is how the semi-secret list of unfinanceable New York buildings has
always worked. And whoever buys the apartment from you may well need a conforming loan even if
you did not.

Source:
FHFA
2026 conforming loan limits; RLS active listings as at 17 August 2026, Manhattan condominium
n=2,635, citywide condominium n=3,589, co-op n=2,358.

## The waived side: a four-apartment building in Stuyvesant Heights

- [680 Greene Avenue #3, Brooklyn, NY 11221 — $1,100,000, 2 bed, 2 bath](https://realestaterebatesnewyork.com/buy/newyorkcity/brooklyn/11221/680-greene-avenue-3-ny-11221)

## The reviewed side: 101 apartments on Park Avenue

- [45 PARK Avenue #1206, New York, NY 10016 — $1,500,000, 1 bed, 1.5 bath](https://realestaterebatesnewyork.com/buy/newyorkcity/manhattan/10016/45-park-avenue-1206-ny-10016)

### Which rulebook governs the apartment you are looking at?

What kind of ownership, and how many apartments in the building?

- **A condominium of 2 to 10 apartments** — Roughly a third of Brooklyn condominium listings and one in twenty in Manhattan.
  Project review is generally waived (Potential exemption): The 15 percent reserve test does not reach a waived project. Confirm the building is not part of a master association if it has five to ten apartments, and that it is not flagged unavailable in Condo Project Manager.
  [Compare condo and co-op ownership](https://realestaterebatesnewyork.com/guides/condo-vs-coop-nyc)
- **A condominium of 11 or more apartments** — Nearly nine in ten active New York condominium listings.
  Full Review, and the reserve test applies from January (Review required): Ask for the budget, the reserve study, the percent funded, any special assessment and the most recent structural or mechanical inspection. The reserve line is the least of those.
  [Estimate your closing costs](https://realestaterebatesnewyork.com/calculators/buyer-closing-cost-calculator)
- **A co-operative** — 2,358 active listings, and a different section of the Selling Guide.
  No percentage reserve test, and no waiver either (Review required): Two years of audited financials, the operating deficit, the sponsor position and Section 216 status are what decide this one. Building size buys you nothing here.
  [Model a co-op share loan](https://realestaterebatesnewyork.com/calculators/mortgage-calculator)
- **A condop** — 133 active listings, 115 of them in Manhattan.
  Both entities are assessed, and together (Review required): The co-op has to hold the majority of the square footage and the common interest, and control the condominium board. Ask for the condominium financials as well as the co-op’s.
  [Talk to Régis about a specific building](https://realestaterebatesnewyork.com/contact)

**Four apartments in the same city can face four different levels of lender scrutiny. Establish which one applies before you write an offer.**

## What I would actually ask, and what I do

I have read a lot of coverage of this change over the past few months and most of it stops at
the 15 percent. Having now worked through what it costs and which apartments it reaches, here is
where I would put a buyer's attention.

Ask for the percent funded, not the percentage allocated. A building can pass
Fannie Mae's test and still have a reserve fund at a small fraction of what its own study says it
needs. The allocation is an input; the funding level is the answer. If the board has a reserve
study, ask what year it was done and whether the budget follows its highest recommended figure,
because that is the wording the lender will be reading.

Ask what has been inspected recently and what it said. In New York the facade
report exists whether or not anyone volunteers it, and $10,000 an apartment of unfunded work inside
twelve months makes the building ineligible. That is a sharper threshold than anything in the
reserve rule.

Ask what is downstairs. If there is a hotel, a rental building or a large
retail condominium in the same structure, somebody has to do the 35 percent arithmetic across the
whole building, and the answer is not obvious from the lobby.

And do not read a low monthly charge as good news. Two decades of keeping
charges down is the most common reason a building arrives at 2026 with a reserve problem, and the
buyer who inherits it pays for the discount the previous owners enjoyed. The building charging
$1,858 a month with a funded reserve is cheaper to own than the one charging $1,200 with a facade
job coming.

On my side of it: the commission is the seller's to offer. Whatever it turns out to be, I
share half of it with you. At a 3 percent buyer-broker commission on the $1,595,000 median
New York condominium ask, that is $23,925 back to you at closing. For context, it
is about twenty-three years of the monthly increase this entire rule change can produce at the
median. That is not the reason to buy a particular apartment. It is the reason to have someone
reading the building's financials properly before you do.

## Sources and methodology

This article was written by Régis Roumila, a licensed real estate broker in New York and New Jersey and the founder of Real Estate Rebate Team, with more than 25 years in the New York City market.

Every rule, threshold and date above was read in Fannie Mae's own Selling Guide rather than
taken from a summary, and checked against it on 17 August 2026. Each Guide section prints its own
published date; the four cited here all read 5 August 2026. Where secondary coverage and the Guide
disagree, the Guide controls, and the article says so on the page. Two disagreements are flagged
in the text: several widely shared write-ups state that the 15 percent reserve requirement applies
to co-operatives, and the section that governs co-op projects contains no percentage test; and New
York trade coverage still prints a 20 percent commercial space limit where the current Guide reads
35 percent.

The New York figures are counted from our own RLS listing feed, filtered to active for-sale
listings in the five boroughs on 17 August 2026, and joined to the City's PLUTO file through each
building's tax lot to get the residential apartment count. Counts, sample sizes and what could not
be matched are stated in the source note under each table and chart. The reserve multiplier is
derived arithmetic, not a forecast, and the assumptions behind it are stated where it appears.

Primary sources

- Fannie Mae Lender Letter LL-2026-03, 18 March 2026, the announcement of all of these changes

- Freddie Mac Bulletin 2026-C, the matching reserve change

- Selling Guide B4-2.2-01, Full Review Process, the reserve percentage test and the reserve study alternative

- Selling Guide B4-2.1-02, Waiver of Project Review, the two to ten apartment thresholds

- Selling Guide B4-2.1-03, Ineligible Projects, critical repairs, commercial space, litigation and single-entity ownership

- Selling Guide B4-2.3-02, Co-op Project Eligibility, including the condop requirements

- FHFA conforming loan limit values, for the 2026 high-cost area figure

- NYC Department of City Planning, PLUTO, for residential apartment counts by tax lot

- NYC Department of Buildings, Facade Inspection Safety Program

Coverage cited for context

- Brick Underground on what the changes mean for NYC condo buildings, 18 May 2026

- CNBC on the 3 August start date, 1 August 2026

Photography

- Hero, facade technician on rope access: photograph by Tessa Bury, CC BY 4.0, via Wikimedia Commons

- Kane Street rowhouses, Cobble Hill: photograph by Beyond My Ken, CC BY-SA 4.0, via Wikimedia Commons

- Sidewalk shed, West 47th Street: photograph by Jim Henderson, CC BY-SA 4.0, via Wikimedia Commons

- The two apartment cards carry the listing brokerage's own photography through the REBNY RLS feed, credited on each card

Related on this site

- Condo vs co-op in NYC: the complete guide

- NYC buyer closing cost calculator

- NYC mortgage calculator for condo and co-op loans

- How the Buyer Commission Share works

To have a specific building's financials read before you make an offer, or for a buyer
consultation, contact Régis Roumila.

This article is general information about lender project standards and how they apply in
New York. It is not legal advice, tax advice, mortgage advice or an appraisal, and it does not
determine whether any particular building is eligible for financing. Lender overlays vary, and
guideline text changes. Confirm the current requirements with your lender and your attorney before
relying on any of it.

## Frequently Asked Questions

### What are the new Fannie Mae condo guidelines for 2026?

Lender Letter LL-2026-03, issued 18 March 2026, retired the Limited Review process for loan applications dated on or after 3 August 2026, widened the project review waiver from four apartments to ten, retired the 50 percent investment property concentration limit in established projects, capped master policy per-unit deductibles at $50,000 from 1 July 2026, and raises the minimum replacement reserve allocation from 10 percent to 15 percent of annual budgeted assessment income for applications dated 4 January 2027 or later. Freddie Mac matched the reserve change in Bulletin 2026-C.

### Does the 15 percent reserve rule apply to New York co-ops?

No. Co-op project eligibility is governed by Selling Guide B4-2.3-02, which contains no percentage reserve test. It requires the budget and two years of audited financial statements to show adequate cash flow and "adequate replacement and operating reserves", along with limits on operating deficits, a 50 percent principal-residence share test and Section 216 qualification. Several widely shared summaries say the 15 percent applies to co-ops. Read the section itself before acting on that.

### Does a New York condo need to keep 15 percent of its money in reserves?

No. The test is on the budget, not the bank balance. The lender divides the annual budgeted replacement reserve allocation by the annual budgeted assessment income. Nothing requires a reserve account equal to a share of the building’s value or assets.

### How much can this raise my common charges?

At most about 5.9 percent, and only for a building sitting at exactly 10 percent today that funds the whole gap by raising charges rather than moving money between budget lines. On the $1,442 median monthly charge across active New York condominium listings that is about $85 a month. In Manhattan, at a $1,858 median, about $109. Many buildings already budget above 10 percent and will pay less or nothing.

### Why would a condo not be Fannie Mae approved?

The most common reasons in New York are unaddressed critical repairs, including any unfunded work costing more than $10,000 per apartment due within twelve months; commercial or mixed-use space above 35 percent of the building, counting rental apartments and hotel rooms as commercial; pending litigation touching safety, structural soundness or habitability; more than 15 percent of units 60 or more days in arrears; single-entity ownership above the threshold; and inadequate insurance. The reserve allocation is one item on a long list.

### Can I still get a mortgage if the building allocates less than 15 percent?

Possibly. A lender may rely on an acceptable reserve study instead of the percentage, provided the study is current, the project’s funded reserves meet or exceed its recommendations, and the budget includes the highest recommended reserve allocation in the study. A reserve funding goal that lets the cash balance approach zero, the baseline funding method, cannot be used to waive the requirement.

### Do these rules apply to jumbo mortgages?

Not directly. They govern loans written for sale to Fannie Mae or Freddie Mac. Since 59.9 percent of active Manhattan condominium listings are priced above the $1,512,188 that a 20 percent deposit keeps inside the $1,209,750 conforming limit, a lot of Manhattan buying is jumbo. But jumbo and portfolio lenders set their own project standards and many adopt the agency ones, and the buyer you eventually sell to may need a conforming loan.

### Should a cash buyer care about any of this?

Yes. The financial condition of the building is part of what you are buying, and mortgage eligibility decides how many people can bid when you sell. A building that is difficult to finance has a smaller buyer pool, and that shows up in the price rather than in the brochure.

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