Condo owners across the country could see their home insurance costs falling as a result of new rules for mortgage giants Fannie Mae and Freddie Mac proposed by the Federal Housing Finance Agency (FHFA) this week.

Experts say the updates could help hundreds of condo buildings, if not more, to obtain insurance.

Why It Matters Home insurance rates have climbed all across the country over the past few years as a result of a rise in the cost of construction materials used to rebuild damaged buildings and the growing threat posed by more frequent, more severe natural disasters. In 2026, premiums are expected to increase for the fifth year in a row, according to Insurify, with average annual costs jumping by 4 percent. Based on NerdWallet data, the average U.S. homeowner spends $2,490 a year on home insurance, but costs vary from state to state, with Oklahoma, Nebraska, and Kansas being the most expensive. For millions of Americans, this extra financial burden has come on top of other rising costs—including property taxes and homeowners association (HOA) fees—and has left them struggling to afford their homes.

This is especially true for condo owners in Florida, where new building safety legislation passed in the aftermath of the Surfside collapse has imposed stricter requirements on condo associations, requiring them to build up their reserves to address maintenance issues -- a move that has led to skyrocketing HOA fees for unit owners and has triggered a surge in sales in the state.

What To Know

The string of updates to Fannie Mae’s and Freddie Mac’s policies introduced by the FHFA allows condo builders to use cheaper coverage on an actual cash value (ACV) basis and simplifies rules around deductibles, in a move that the agency hopes would help more buildings to qualify for mortgages.

Actual cash value (ACV) basis considers what the roof is “actually worth today,” the FHFA wrote, after depreciation. The rest of the house still gets full replacement cost value (RCV) protection, which covers the cost of replacing the roof with a new one if disaster hits.

“This fixes a real problem,” the agency wrote in a press release on the updates. “Full replacement roof coverage has become ridiculously expensive and hard to find in many states.”

These changes, that the agency has pitted against Biden-era policies, should lead to “lower monthly payments, more first-time buyers able to close on homes, and rural communities keeping access to insurance they were at risk of losing.”

Homeowners would still get “strong protection,” the agency said, “just at prices that actually make sense in 2026.”

What People Are Saying

FHFA Director Bill Pulte said in a press release: “Thanks to President Trump’s landslide victory, we are replacing a disruptive and expensive Biden insurance mandate with commonsense policies for today’s market. Lower insurance costs and mortgage rates shrink the monthly payment of a new mortgage, giving new homebuyers confidence that they can afford the American dream.”

Missouri Sen. Eric Schmitt, a Republican, said in a press release: “Imposing higher costs on families and limiting consumer choice was another outrageous example of big government overreach by the Biden Administration. I’m grateful to the Trump Administration and Federal Housing Director Pulte for working with me to repeal this harmful mandate, giving families the flexibility they need and ensuring rural communities have better access to choose an insurance plan that best reflects their needs.”

South Carolina Sen. Tim Scott, a Republican, wrote on X: “Lower costs mean lower monthly payments and more families able to achieve homeownership, especially in rural and condo markets.”

Realtor.com senior economist Joel Berner said in a report: “If these provisions help cut monthly insurance costs and/or expand insurance coverage to more condos, it should be a boost to demand in a segment of the market that badly needs it.”

What Happens Next

While these updates might lower insurance costs for condo owners in the U.S, they should be wary that more changes are coming that could inflate their overall costs.

Starting on January 4, 2027, the FHFA will require condo groups to allocate 15 percent of their annual budgeted income assessment to capital expenditures and deferred maintenance, up from 10 percent now. For condo associations struggling to build up their reserves, especially in Florida, where new building safety legislation has thrown the market into chaos, it might not be enough time, experts warn.

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