Insurance Requirements Intensify for Fannie and Freddie Backed Mortgages 

Fannie Mae’s and Freddie Mac’s minimum insurance coverage requirements for loans that they purchase have become more complex following the Surfside Condo collapse in 2021. These insurance requirements ensure that debt can be repaid and homeowners can rebuild in the case of damaged or destroyed property. Failure to meet the minimum insurance requirements may prevent Fannie Mae and Freddie Mac from purchasing loans on a given condo. This may make it more difficult for prospective buyers to obtain mortgages and cause the condos to sell at lower prices. Given the scale of the increase in insurance premiums, condo owners are facing economic challenges associated with the higher monthly fees required to maintain insurance coverage.

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