Fannie Mae and Freddie Mac’s Full Review mandate is already in effect, and a bigger reserve requirement is coming in January. 

LOS ANGELES, CA — While August MLS CLAW™ data shows 870 condos sold across Los Angeles County against 6,424 active listings and a median sale price of $665,000, the Greater Los Angeles REALTORS® (GLAR) is flagging a financing change that is already reshaping how those transactions get approved. 

Fannie Mae and Freddie Mac announced coordinated updates to condominium lending standards on March 18, 2026. Several changes took effect immediately, but the one with the widest reach hit on August 3, 2026: the retirement of the Limited Review process. Every conventional condo loan application dated on or after that day now requires a full review of the building’s finances, insurance, and reserves, not just the buyer’s. This is the latest in a series of changes being made by GSEs and the insurance industry in the wake of the Surfside condominium collapse in June, 2021.  

“This isn’t a future problem for condo buyers in LA. It’s already the process they’re going through right now,” said Chris Duff, 2026 President of GLAR. “Agents need to be setting expectations with condo buyers and sellers today about longer timelines, not waiting until an escrow gets held up to explain why.” 

What Changed on August 3 

• The Limited Review and Streamlined Review shortcuts are gone. Full Review is now required for the large majority of condo loan applications. 

• The 50 percent investor concentration limit was removed for established projects going through Full Review, which helps some previously ineligible buildings qualify. 

• The waiver of project review was expanded to new and established projects with 10 or fewer units, a break for smaller buildings that were previously subject to full scrutiny regardless of size. 

What’s Coming in January 

A separate and larger change is scheduled to take effect around January 2027: the minimum reserve funding requirement for condo associations is set to rise from 10 percent to 15 percent of the association’s budget. Buildings that haven’t started building toward that threshold could see financing eligibility affected heading into next year. 

“Boards and HOA managers should be having this conversation with their members now, not in December,” Duff said. “A building that can’t clear the reserve bar doesn’t just affect one seller. It affects every owner trying to sell or refinance in that building. Condo boards and HOAs cannot keep putting off deferred maintenance, and need to have serious conversations about properly budgeting for maintenance, upkeep, and reserves.” 

What This Means for LA Buyers and Sellers 

With 6,424 condos on the market against 870 sold in August, condo inventory in Los Angeles was already outpacing sales before this financing shift took hold. Longer underwriting timelines and stricter building-level scrutiny could add friction to a segment of the market that has historically served as a more attainable entry point than single-family homes, currently priced at a median of $1,030,000 countywide. 

GLAR recommends buyers confirm a condo building’s Fannie Mae and Freddie Mac eligibility status early in the search process, and that sellers in HOA-governed buildings get ahead of reserve and budget documentation requests before listing.