Condo industry asked Congress to pause the Fannie Mae reserve floor. FHFA said no.

The Community Associations Institute, the national trade group for managing agents, community association attorneys, engineers, and vendor firms, went to Capitol Hill on September 23, 2026 for its annual congressional summit. Its lead ask for the condo track: pressure the Federal Housing Finance Agency to suspend Fannie Mae and Freddie Mac's updated condominium lending standards for one additional year. FHFA had already said no. The standards ended limited reviews for established condominiums in August and will set a 15 percent reserve floor in January. They are the primary private-sector mechanism filling the reserve gap that state legislatures, including New York, have not closed.

What CAI asked Congress to do.

In March 2026, Fannie Mae issued Lender Letter LL-2026-03 and Freddie Mac published a corresponding bulletin, announcing the most significant update to condominium lending standards in several years. The changes arrived in two phases: the elimination of limited reviews for established condominiums, effective August 3, 2026, and a new minimum reserve allocation of 15 percent of annual assessment income, effective January 4, 2027, for any mortgage originated after that date.

CAI sent a letter to FHFA requesting that both phases be suspended by at least one year. The stated reason was that volunteer boards needed additional time to understand the requirements and commission qualifying reserve studies. When FHFA declined, CAI escalated to Congress. At the September 23 summit, advocates from across the country met with members of Congress and congressional staff, asking lawmakers to use their oversight authority over FHFA to push for the delay. A coalition of housing organizations had separately sent its own letter to FHFA making the same request. FHFA held its position both times.

CAI was not asking Congress to repeal the standards. The specific request was a one-year pause in implementation: the reserve floor's effective date would shift from January 4, 2027 to January 4, 2028, while the August 3 full-review requirement remained in place.

Why FHFA said no.

FHFA's refusal preceded the summit. In response to CAI's delay letter, the agency stated that Fannie Mae and Freddie Mac would implement the new condominium lending policies on schedule. FHFA sets the direction for both enterprises and has authority to override their underwriting guidelines; its affirmation that the rules would proceed on time ended the administrative route.

The Fannie Mae standards were written with a specific event in view. The June 2021 collapse of Champlain Towers South in Surfside, Florida, which killed 98 people, revealed that inadequate reserve funding was a predictable precursor to structural failure. Fannie Mae's post-Surfside review of its condominium underwriting concluded that buildings without verified reserve adequacy posed unacceptable financing risk. The reserve floor is the product of that review.

A one-year delay would allow buildings currently below the 15 percent threshold to originate conventional mortgages through January 2028 without any reserve obligation. Buildings already on Fannie Mae's unavailable list (at least 66 in New York City) would remain there, because the full-review requirement is already in effect. The delay would expand the window for buildings that have not yet failed the test.

What H.R. 9569 does, and what it does not do.

CAI also asked lawmakers to support H.R. 9569, the Making Condos Safer and Affordable Act, introduced on June 30, 2026, by Florida Reps. Debbie Wasserman Schultz and Maria Salazar. The bill's purpose is different from the delay request: it would authorize the Federal Housing Administration to insure condominium rehabilitation loans under Section 234 of the National Housing Act, and would expand the FHA 203(k) rehabilitation loan program so that individual unit owners could use those loans to finance special assessments charged by their association for building repairs.

H.R. 9569 is additive. It would create a new federal financing path for condo owners facing large special assessments: the kind that follow a failed Fannie Mae review or a deferred structural repair. It does not change Fannie Mae's reserve floor, modify the full-review requirement, or address the delay request. CAI is seeking a Senate sponsor for companion legislation; no Senate bill had been announced as of the September 23 summit.

The bill is in committee and has not been scheduled for a floor vote.

What CAI is, and who it represents.

CAI's member base includes the managing agent firms, community association law firms, reserve study preparers, engineers, and vendor companies that derive income from condo and co-op association spending. The organization describes itself as the voice of 78 million Americans who live in community associations. Its policy positions track the interests of both owners and of the professional service firms that associations hire.

In June 2026, CAI's Condominium Safety Public Policy Report recommended that every state enact mandatory reserve studies. The report acknowledged that underfunded reserves are a safety risk. According to CAI's June 2026 report, eighteen states have enacted the requirement; New York is not among them. New York's reserve study bills, A8945 and S7600, were referred to committee in January 2026 and received no floor vote before Albany adjourned on June 18. A post on this site covered that development in August: The condo industry's own trade organization backs mandatory reserve studies. New York's bill didn't advance.

The June 2026 safety report and the September 2026 delay request arrived in the same calendar year from the same organization. A state reserve study mandate and the Fannie Mae reserve floor share the same structural effect: they require boards to fund reserves at an independently verified level, reducing the discretion that boards, their managing agents, and their vendor contracts currently carry. That is not an accusation. It is what both rules do.

The same pattern appeared in Utah earlier this year. When Utah enacted a new state property manager license, CAI advocated for an exemption that excluded community association managers from the requirement. The Legislature granted the carve-out. Utah licensed property managers and exempted the ones who run condos. New York's managing agent registration bill, S.71, did not receive a committee hearing in ten consecutive sessions; the seat its longtime sponsor held is now vacant heading into 2027.

The gap New York offers in its place.

New York's Real Property Law and Condominium Act contain no reserve study mandate and no minimum reserve funding requirement. The reserve fund issue page on this site maps the gap: no credentialing requirement for study preparers, no filing obligation, no enforcement forum. Bills A8945 and S7600, which would have required 30-year reserve studies prepared by credentialed professionals and filed with the Attorney General, were referred to the Housing Committee in January 2026 and received no floor vote before Albany adjourned.

If FHFA or a future administration delays or reduces the Fannie Mae reserve floor, New York has no state-level substitute. Buildings that are currently underfunded would continue to originate conventional mortgages without any reserve obligation. The list of NYC buildings on the Fannie Mae unavailable list (at least 66 as of the most recent published data) represents the floor's enforcement mechanism: buildings that already failed the private-sector test. A delay pauses new additions to that list while changing nothing about the underlying reserve practices.

New York boards that have not yet commissioned a qualifying reserve study have roughly 14 weeks before the floor applies to any mortgage originated at the building after January 4. A study showing that the reserve allocation meets or exceeds 15 percent of annual assessment income satisfies the requirement. A building without a qualifying study, or with one showing funding below that level, loses conventional financing for any buyer using a mortgage originated after that date. The requirement does not come from any state agency. The Fannie Mae floor is the only one that currently exists.

Bottom line.

CAI's June 2026 safety report recommended mandatory state reserve studies. Four months later, CAI asked Congress to delay the federal rule doing what those state studies would require. FHFA declined. The Fannie Mae reserve floor is on track for January 4, 2027.

The two positions are not contradictory on their face: state mandates and the Fannie Mae floor operate through different channels. But they point at the same building condition. The industry's apparent preference is for the state law that has not passed in ten years over the federal rule now in effect — the one it can ask Congress to delay. FHFA has held the line once. Whether it holds again depends on what Congress does next, not on anything in New York's statutes.

Primary sources:
H.R. 9569 — Making Condos Safer and Affordable Act of 2026 (119th Congress, introduced June 30, 2026)
Fannie Mae Lender Letter LL-2026-03 (March 18, 2026)
CAI 2026 Congressional Advocacy Summit — Federal Legislative Priorities
Inman Real Estate News — Condo, HOA Advocates Push for Fannie, Freddie Rule Changes (September 23, 2026)
National Mortgage News — Coalition Escalates Calls for Delay on Fannie, Freddie Condo Rules

Companion resources: Fannie Mae's 15% reserve floor arrives in January. NYC condo boards need to act. · Every NYC condo loan goes to full review on August 3. Is your building ready? · Fannie Mae set a co-op reserve floor. NYC boards use flip taxes instead. · The condo industry's own trade organization backs mandatory reserve studies. New York's bill didn't advance. · Issue: No reserve fund requirement in New York · Write to your representative