There have been a boatload of changes Fannie Mae and Freddie Mac made recently, each having different effective dates.
Highlights
Highlighted here are a couple of concerns for Communities. Although the regulations do not specifically mention co-ops, We would not be shocked if the updates applied there as well. We, of course, will keep you updated as we learn more.
The most important change is that Fannie Mae and Freddie Mac will now be requiring that 15% of the annual assessment income noted on the budget be allocated to the reserve account. There is little evidence that the agencies look at how much is in accumulated reserves, just that the budgeted amount is at least 15% of the total assessment income on the budget. The only exception to this 15% requirement is if a reserve study can confirm sufficient reserves. However, how the agencies define “sufficient” can be a moving target and reserve studies can be cost-prohibitive for many communities. This 15% requirement is effective as of January 4, 2027.
There are some other changes related to insurance that might be of interest and are effective sooner than the update above. More information will be shared in the coming months