FHFA Eases Mortgage Insurance Rules for Condos and Rural Areas

The U.S. Federal Housing Finance Agency oversees Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks, which collectively provide more than $8.5 trillion in funding to the mortgage market. Rising homeowners insurance premiums and the limited availability of roof replacement-cost policies in some states have left condo and rural borrowers facing noncompliant coverage, difficulties securing loans and higher monthly payments.

The FHFA announced on March 18, 2026, that Fannie Mae and Freddie Mac would immediately allow roofs on single-family homes and condos to be insured at actual cash value, while the rest of the property must remain covered at replacement cost. The cap on condo master-policy deductibles will be simplified to $50,000 per unit, with the change taking effect no later than July 1. Industry participants on March 26 opposed the simultaneous elimination of streamlined reviews, estimating that about 40% of condo loans at large lenders would be affected.