Before August 3, 2026, a buyer financing a condo in an established Gold Coast high-rise could often get a conventional loan approved without the lender looking closely at the building. That shortcut no longer exists. Fannie Mae and Freddie Mac retired their abbreviated condo reviews on the same date. For a building with more than ten units, that leaves one main route to a conventional loan: a full review of the association's budget, reserves, litigation and insurance. The building's records have become part of the buyer's approval, and the association's response time has become part of the closing timeline.
Fannie Mae announced the change in Lender Letter LL-2026-03, dated March 18, 2026. Established projects that had qualified for Limited Review "must now be reviewed using the Full Review process or, when applicable, the Waiver of Project Review process." Lenders could adopt the change right away, and they had to apply it to every loan application dated on or after August 3, 2026.
The shortcut covered a lot of ground. Under Fannie's December 10, 2025 Selling Guide, Limited Review applied to attached units in established condo projects. Outside Florida, it allowed loans up to 90% loan-to-value for a principal residence and up to 75% for a second home or investment property. When a loan met those terms, the lender did not have to validate the project any other way. In practice, a buyer putting 10% down on a home they would live in could close without anyone examining the association's reserve fund.
Freddie Mac did the same thing on the same schedule. Freddie's Bulletin 2026-C, also issued March 18, 2026, retired Streamlined Review for applications dated on or after August 3, 2026. Since both agencies changed at once, switching between Fannie and Freddie loan programs doesn't get around it.
Both agencies kept a lighter path, but it depends on building size. Under the current Fannie Mae Waiver of Project Review, eligible properties include detached condo units, units in two-to-four-unit projects, qualifying five-to-ten-unit projects that aren't part of a larger development or master association, and qualifying PUDs. Freddie Mac's new Exempt From Review category covers nearly the same buildings.
| Building type | Conventional purchase path after August 3, 2026 |
|---|---|
| Detached condo unit | Waiver or Exempt From Review may apply |
| Two-to-four-unit condo, such as a converted two-flat | Waiver or Exempt From Review may apply |
| Five-to-ten-unit project, not in a master association | Waiver or Exempt From Review may apply if it qualifies |
| Doorman tower or mid-rise with more than ten units | Full Review |
The table shows why the same federal rule plays out differently from one North Side neighborhood to the next. A converted two-flat in Lincoln Park can still qualify for the waiver. A Gold Coast high-rise, by its size alone, can't. Even the waiver still has conditions: property eligibility and insurance requirements apply, and the project can't carry an "Unavailable" status in Fannie's system.
A Gold Coast resale already had one document deadline built in. Under Section 22.1 of the Illinois Condominium Property Act, the selling owner must get a specific set of association records and make them available to the buyer on request. Once the association receives a written request, its principal officer or designated officer has 10 business days to provide them. The package includes:
Full Review starts a second request on top of that one. A and N Mortgage lists what lenders now examine: budgets, reserves, litigation, structural issues and investor concentration. In the same September 23, 2026 article, the company's chief operations officer, Dean Vlamis, described the timing: "I can get you approved in days, getting information from the association is what takes longer."
Answering the lender's questions doesn't guarantee approval, either. Chicago-area law firm Kovitz Shifrin Nesbit wrote on September 7, 2026 that condo questionnaires are optional forms. If the answers don't establish eligibility, the lender has to ask for more documents. If the lender still can't make a determination, the loan can't be sold to Fannie Mae. A building that responds slowly or only partially can add extra rounds of requests, and each round comes out of the time between contract and closing.
Of everything Full Review looks at, the reserve fund changed the most on August 3. Fannie's lender letter says that when a lender uses a reserve study to show a building's reserves are adequate, the lender must confirm the budget includes "the highest recommended reserve allocation amount in the reserve study." The baseline funding method, which lets a reserve balance get close to zero without going below it, no longer counts. That applies to every application dated on or after August 3, 2026. Freddie set the same date for its own ban on baseline funding.
A second step takes effect next. For Full Review loans with applications dated on or after January 4, 2027, the minimum reserve allocation goes from 10% to 15% of the association's annual budgeted assessment income. That is less than three months away, so a closing scheduled for early 2027 could fall under the new number.
That increase is where the Gold Coast owner's monthly bill comes in. In a March 25, 2026 Daily Herald column, condo attorney Matthew Moodhe of Kovitz Shifrin Nesbit said a negative Fannie Mae status can limit mortgage availability and affect a condo's market value. He added that the higher reserve requirement could lead boards to raise assessments or reallocate reserves. Vlamis, speaking about the Chicago market in general, told A and N Mortgage readers that "buildings have been pushing off special assessments for quite a while."
A board that brings its reserves up to the new standard pays for it through assessments. A board that doesn't may find lenders can't approve loans on its units.
All of this would matter less if buyers had plenty of time. They don't. The Illinois REALTORS August 2026 City of Chicago report, with data current as of September 8, counted 699 condo closings citywide in August 2026, down 1.4% from a year earlier. The condo median price was $369,950, up 8.2%, while the single-family median rose 2.1%. Citywide inventory across all property types was 3,541, down 23.3%, and days on market held at 26.
The North Side numbers look similar. Loop North News reported on August 3, 2026 that the North Side attached-home median, which covers condos, townhomes and co-ops, hit a record $450,000 for Q2 2026. That was up 4.7%, and the average time on market was 37 days, 12 fewer than a year earlier. Near North/Gold Coast was one of the neighborhoods where attached-home median prices rose.
When buyers compete on terms as well as price, they offer shorter closings. Full Review pushes the other way, because those short closings now depend on how quickly a board, a management office and a lender can trade documents. Two offers at the same price can carry very different risk depending on whether the building can produce its records quickly.
A building that fails Full Review isn't necessarily a dead end. A and N Mortgage notes that non-warrantable condo financing through portfolio lenders exists for buildings that don't meet agency guidelines, with availability and terms depending on the specific issue and the lender. Those loans are a different product, though, and the pool of buyers who can use them is smaller.
On the seller's side, Section 22.1 limits what the association can charge for the resale disclosure package. The fee must cover only direct out-of-pocket and copying costs. It is capped at $375, adjusted each year for the Consumer Price Index for All Urban Consumers (CPI-U), plus up to $100 for rush service completed within 72 hours.
The package gets longer next year. Public Act 104-734, effective January 1, 2027, adds the association's collection policy for unpaid assessments to the Section 22.1 list. A Gold Coast unit listed this fall and closing after New Year's could fall under both the expanded state disclosure list and the 15% federal reserve minimum.
The 22.1 package and the lender's Full Review ask about many of the same things: capital plans, reserves, litigation, insurance. A seller who requests the statutory package when listing, rather than after accepting an offer, has those answers available during the buyer's financing period. The statute requires the association to respond within a set time. Federal guidelines decide whether the answers support a loan.
Is the 15% reserve rule already in effect? No. It applies to Full Review loans with applications dated on or after January 4, 2027. The rules in effect since August 3, 2026 are the end of Limited Review and the ban on baseline-funded reserve studies.
Did Illinois pass a law requiring condo reserve studies every five years? No. HB0220 proposed reserve studies updated every five years for associations with major shared components. It passed the House in 2024 but expired at the end of the 103rd General Assembly without being enacted, according to the Illinois General Assembly bill record. The tighter reserve standards in 2026 come from the two loan agencies, not from Springfield.
Does this affect refinances? Some. Fannie's waiver still covers certain Fannie-to-Fannie limited cash-out refinances up to 80% loan-to-value, subject to checks for critical repairs. Purchases in larger buildings have no comparable exception.
If you're buying or selling a Gold Coast condo this fall, the building's paperwork deserves as much attention as the price. Fogel Slate Group can help you collect the Section 22.1 package early and plan your contract dates around the association's response time. Schedule a consultation before you set a closing date.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
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