A unit is under contract. The buyer’s credit looks fine. Then the lender says the project needs a Full Review — and the conversation shifts from the borrower’s file to the association’s budget and reserve study.

That shift got more common on August 3, 2026, when Fannie Mae retired Limited Review for established condo projects (with parallel Freddie Mac changes to Streamlined Review). More loans now travel through Full Review, where reserve funding is one of the items lenders evaluate. ReserveGap does not determine project eligibility; only the lender’s project review decides.

What Limited Review used to do

Limited Review was a lighter project pathway for certain established condos. In practice, it often meant less documentation and less scrutiny of items that Full Review examines in depth — including whether the budget’s reserve contribution meets the published percentage benchmark or a qualifying study pathway.

It was never a free pass for every building, and it never replaced the need for accurate association documents. It did mean some deals could close without the same reserve deep-dive Full Review requires.

What changed on August 3, 2026

Summarized from Fannie Mae Lender Letter LL-2026-03 (and related Selling Guide updates):

  • Limited Review for established projects is retired for loan applications dated on or after August 3, 2026.
  • Many of those loans now require Full Review, unless the project qualifies for a separate waiver / exempt path the lender can use.
  • On the same application-date line, when a lender uses the reserve-study pathway instead of the percentage floor, the budget must fund the study’s highest recommended reserve contribution — and baseline funding (reserves allowed to trend toward zero) is not accepted for that pathway.

A second date still matters for the percentage floor itself: for Full Review applications on or after January 4, 2027, the replacement-reserve allocation benchmark rises from 10% to 15% of annual budgeted assessment income, unless a qualifying study pathway is used. That is a separate article; the point for August is simpler — more files hit Full Review, so more boards meet the reserve questions sooner.

Where reserves show up in Full Review

Full Review is a project review, not a single “reserves pass/fail” stamp. Lenders look at budget adequacy, insurance, delinquencies, litigation, critical repairs, and other Selling Guide items. On reserves specifically, two numerical comparisons show up often in board conversations:

  1. Study pathway (applications from Aug 3, 2026): Does the adopted budget’s annual reserve contribution meet the reserve study’s highest recommended contribution (study generally within three years of the lender’s project decision, with other lender criteria)?
  2. Percentage pathway (15% from Jan 4, 2027): Is the annual reserve contribution at least 15% of total annual budgeted assessment income (with lender-permitted exclusions the association may or may not have calculated the same way)?

These are alternative pathways, not two scores you must “win” on the same day in the same way. An indicative gap on either comparison is not a fine, not a court order, and not a final eligibility decision.

What to do before the next closing

Boards and managers who want fewer surprises can do the arithmetic before a loan officer asks:

  1. Pull this year’s adopted budget — assessment income and the reserve contribution line.
  2. Pull the latest reserve study — find the highest recommended annual contribution (if the study shows more than one funding schedule, use the highest).
  3. Note reserve cash on hand as of a stated date (useful for funding conversations; the percentage floor is about the contribution line, not the bank balance alone).
  4. Run both comparisons, then decide whether the next board packet is about raising the reserve line, updating a study, or costing a special assessment / loan / hybrid — which is what a ReserveGap report is built to illustrate.

If closings are already in the pipeline, the same packet helps the manager and attorney answer questionnaire and document requests faster. It still does not replace the lender’s review.

Read alongside

For Full Review budget and reserve-study conditions, see the Selling Guide. The parallel changes are documented in Freddie Mac Bulletin 2026-C.

Reports are prepared after checkout and emailed within 1 business day. Not an instant download. Results are indicative; only a lender’s project review decides eligibility.