If you're financing a Florida condo with a conventional loan, Fannie Mae just rewrote a chunk of the rulebook your lender uses to evaluate the building — not just your file. Lender Letter LL-2026-03, issued March 18, 2026, retires a review shortcut many associations relied on and raises the bar on reserves and insurance. Here's what actually changed and what it means for your purchase.
The PERS Shortcut Is Going Away
Per Fannie Mae Lender Letter LL-2026-03, the Project Eligibility Review Service (PERS) — an expedited path that let certain condo projects get pre-approved status recognized across multiple lenders — is being retired. Associations and lenders who relied on an existing PERS approval to skip a full project review will need to work within Fannie Mae's standard project review process going forward. For Florida buyers, this generally means a more thorough (and potentially slower) condo project review during underwriting, rather than a fast-tracked approval carried over from a prior PERS certification.
Reserve Study Minimums Just Went Up
The letter also raises the minimum reserve allocation benchmark used in Fannie Mae's project reviews from 10% to 15% of the association's budget. In practice, this means association reserve studies and budgets get a tighter look — a building that comfortably cleared the old 10% bar isn't automatically in the clear at 15%. For Florida associations still catching up on post-Surfside reserve funding requirements, this raises the stakes on having a current, well-documented reserve study in hand.
What's Also Retiring: The "Limited Review" Option
Fannie Mae's Limited Review option — a lighter-touch review previously available for certain established, low-risk condo projects — is also being retired under this update. That removes another shortcut lenders could use to close condo files faster on lower-risk buildings, pushing more projects into the standard, fuller review path.
Buying a Florida Condo? Get the Project Reviewed Early
With PERS and Limited Review retiring, the earlier your building's project review starts, the less likely it delays your closing. Let's get ahead of it.
Talk to Joe About Your Condo Purchase →New Insurance Requirements, Effective July 1, 2026
Alongside the review-process changes, LL-2026-03 sets new condo insurance standards effective July 1, 2026:
| Requirement | New standard |
|---|---|
| Master policy per-unit deductible | Capped at $50,000 |
| Unit-owner deductible | Capped at the greater of 5% of coverage or $2,500 |
| Roof coverage | Must be insured, though not necessarily at full replacement cost |
| Reserve study minimum | Raised from 10% to 15% of budget |
For Florida associations that have struggled with insurance carriers non-renewing or capping coverage, the roof-insurance requirement is worth flagging early with your association's board — a building with inadequate roof coverage under the new standard could face financing friction that has nothing to do with any individual buyer's file.
Why This Matters More in Florida Than Most States
Florida condo associations have already been through several rounds of tightened reserve and inspection requirements at the state level since the Surfside collapse. Fannie Mae's national reserve and insurance changes stack on top of that state-level scrutiny, which means a Florida condo that's behind on reserve funding or has thin insurance coverage now faces two layers of review — the state's structural and reserve requirements, and Fannie Mae's project eligibility standards. If you've been following the state-level reserve law changes, our guide to Florida's condo reserve law and conventional underwriting covers that state-level layer in more detail — this post is specifically about what changed at the Fannie Mae level in March 2026.
What To Do If You're Under Contract on a Florida Condo
- Ask the association whether the building previously relied on PERS or Limited Review status, and whether a fresh project review has been requested.
- Request the current reserve study and check whether the association is funding at or above the new 15% benchmark.
- Confirm the master policy meets the new per-unit deductible cap and that the roof is insured under the policy.
- Build in extra timeline if the project hasn't been reviewed under the new standards yet — a first-time full review takes longer than a PERS-recognized approval did.
Bottom Line
None of this changes your personal qualifying requirements — your credit, income, and down payment guidelines are unaffected. What it changes is how thoroughly the building itself gets vetted before your loan can close, and Florida buyers should expect that vetting to take a closer look at reserves and insurance than it did a year ago.
Frequently Asked Questions
What is Fannie Mae Lender Letter LL-2026-03?
It's a March 18, 2026 update to Fannie Mae's condo project eligibility requirements, retiring the PERS expedited review process, raising the minimum reserve study requirement, and introducing new condo insurance standards effective July 1, 2026.
What changed with condo reserve requirements?
Fannie Mae raised the minimum reserve allocation benchmark used in project reviews from 10% to 15% of the association's budget, tightening the bar for how well-funded a condo association's reserves need to be.
What are the new condo insurance requirements?
Effective July 1, 2026, master policy per-unit deductibles are capped at $50,000, unit-owner deductibles are capped at the greater of 5% of coverage or $2,500, and roofs must be insured, though not necessarily on a full replacement-cost basis.
Does this affect all condos or just new construction?
It applies broadly to condo project reviews used in conventional financing, including established associations — not just new-construction or conversion projects.
Source: Fannie Mae, Lender Letter LL-2026-03 (March 18, 2026).
Get Your Condo Purchase Reviewed Before You're Under Deadline Pressure
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Talk to Joe About Your Condo Purchase →Joe Pistone & Team · CrossCountry Mortgage · NMLS# 2087918 · Equal Housing Opportunity · Educational only — not a commitment to lend