Financing & underwriting
The reserve bar for a conventional condo loan is about to move.
Fannie Mae and Freddie Mac currently require an association to put at least 10% of its annual budgeted income into reserves to keep a building eligible for conventional financing. For loan applications dated January 4, 2027 and later, that minimum rises to 15%. A building funding comfortably above 10% today may not clear 15% without a dues increase, a special assessment, or both.
Why this is separate from Florida's own reserve law
Florida's SIRS and reserve-study rules (the state law) set what an association has to study and fully fund over time. Fannie Mae and Freddie Mac's 10%/15% rule is a separate, nationwide lending requirement layered on top — it governs whether a buyer's loan can close, not what the state requires the association to do. A building can be in full compliance with Florida law and still fail the lender's funding-percentage test, or vice versa.
Florida gave boards one lever to manage the squeeze
Under HB 913 (effective July 1, 2025), a board can ask owners to approve pausing reserve contributions for up to two consecutive annual budgets — but only after a milestone inspection recommends urgent repairs, and only to redirect that money toward the repairs the inspection flagged. It's a narrow exception, not a general way to soften the climb to 15%. A building that used this pause recently is one where the reserve percentage in this year's budget may look lower than it will again next year.
What to check before the 2027 cutover
- What percent of this year's budget is actually allocated to reserves, in the budget itself — not the percent-funded number from the SIRS, which answers a different question.
- Whether the board has used, or is discussing, a milestone-inspection reserve pause.
- Whether the association is already planning a dues increase or assessment to clear 15% before applications start landing in 2027.
These numbers are in the budget and board minutes your association already gave you, alongside the SIRS and reserve study. Send us what you have — we'll check free whether there's enough there to work out your unit's likely exposure either way.
Curious what trips a lender's full review in the first place? Non-warrantable condo, explained → Want the reserve math itself? What's actually in a SIRS →