Condo Loan Rules Changed in 2026: What Sacramento Buyers and Sellers Need to Know

If you're buying or selling a condo in Sacramento, the condo loan rules lenders use to approve a building changed in 2026. Most of the changes are already in effect. One more arrives in January.

At Surroundings, we handle the home and the loan side of a move. Here is what changed and what it means for you.

With a condo, the lender approves you and the building. It looks at the association's budget, its reserves and its insurance. Two condos at the same price can finance differently because of their buildings.

In March 2026, Fannie Mae announced new condo project standards in alignment with Freddie Mac. Fannie Mae said it had seen a link between buildings with underfunded reserves and buildings that need critical repairs.

• August 3, 2026: the lighter review ended. Many established buildings used to qualify for a shorter review called Limited Review. For loan applications dated on or after August 3, 2026, it is gone. The building gets a Full Review unless it qualifies for a waiver.
• August 3, 2026: reserve studies held to the high number. When a lender relies on the association's reserve study, the budget must include the highest recommended reserve amount in that study.
• July 1, 2026: a cap on the building's deductible. The master policy's per-unit deductible can be no more than $50,000. When the master policy has a per-unit deductible, the owner needs a unit policy that covers at least that amount.
• Now: small buildings can skip the review. A building with 10 or fewer units can qualify for a waiver of project review. A building of 5 to 10 units can't be part of a master association or a larger development.
• Now: investor loans. For investor loans in established buildings under Full Review, the old 50% limit on investor-owned units is retired.
• Now: roofs and unit deductibles. Roofs must still be insured, but not always at replacement cost. A unit owner's policy can carry a deductible up to 5% of its coverage or $2,500, whichever is greater.
• January 4, 2027: bigger reserves. The building's budget must set aside at least 15% of its annual assessment income for reserves, up from 10%. This applies to Full Review for loan applications dated on or after January 4, 2027.

Source: Fannie Mae Lender Letter LL-2026-03, March 18, 2026. FHA and VA set their own condo rules.

Ask for the association's budget, reserve study and insurance papers early. Your lender will need them, and so will you.

Look at the reserves line in the budget. A building setting aside less than 15% of its income may not meet the new standard after January 4, 2027. Ask how the board plans to handle it.

Check the master policy deductible. If it is per unit, your own condo policy has to cover at least that amount. An insurance professional can read the documents with you.

We can review a building's paperwork with you before you write an offer. Start with our guide to buying a home in Sacramento County, or see how financing works with us.

Your buyer's loan depends on your building. A building that doesn't meet the standards can narrow the loans available to your buyers.

Request the association documents as soon as you decide to sell. That means the budget, the reserve study, the insurance papers and the lender questionnaire. Getting them early keeps escrow on schedule.

Are you thinking about a sale? Start with a home valuation and our guide to selling your home in Sacramento County.

Starting November 2, 2026, condo appraisals move to the same redesigned report as houses. The old condo form is retired. Read how the new appraisal form works.

Do these rules apply to every condo loan?

They apply to conventional loans sold to Fannie Mae, and Fannie Mae made them in alignment with Freddie Mac. FHA and VA set their own condo rules.

Is my condo building approved?

It depends on the loan and the building's current papers. We can check before you make an offer.

What if my building has 10 or fewer units?

It may qualify for a waiver of project review. The insurance rules still apply.

Are you buying or selling a condo in Sacramento? Talk with our team and we'll look at the building's paperwork with you. We shop loans across a network of approved lenders, and you're always free to bring your own.