Every condo listing tells you about the granite countertops. None of them tells you about the roof fund. This week, the two giants of the American mortgage market decided the roof fund is the part that matters. And roughly six in ten buildings are about to discover they have been telling buyers a flattering story.
Here is the change. Fannie Mae and Freddie Mac stand behind most condo mortgages in America, so their rules work like national law. They now require condo associations to set aside at least 15% of their annual dues income for future repairs. The rule traces back to Surfside, the 2021 Florida condo collapse that showed what decades of skipped maintenance can hide behind a nice facade.
The uncomfortable statistic: only about 39% of associations have enough saved today. Buildings running 30% or more short are common. Most American condo buildings, in other words, have been charging dues that do not cover what the building actually costs.
The monthly bill
The direct hit is modest: dues are expected to rise roughly $13 to $14 a month on average as boards catch up. Nobody’s retirement fails over $14.
But look at the trend it joins. Median condo dues are now about $420 a month, up 29% since 2019 — pushed by insurance, labor, materials and, yes, buildings finally paying for repairs they postponed. The new rule does not create that cost. It just stops letting boards hide it.
| The condo-dues picture | Number |
|---|---|
| New reserve requirement (Fannie/Freddie) | ≥15% of annual dues income |
| Associations adequately funded today | ~39% |
| Underfunding of 30%+ | Common |
| Estimated dues increase from the rule | +$13–14/mo |
| Median condo dues | $420/mo |
| Dues growth since 2019 | +29% |
There is a wrinkle for buyers and sellers alike. Buildings below the 15% bar can still qualify for normal mortgages, but only by producing a reserve study. That is a report from an engineer on what the building will need and whether the money will be there. The reserve study, long the least-read document in real estate, just became the one that decides whether a building’s units can be financed at all.
Cheap dues cost more
Here is the counterintuitive part, and the reason we are writing about it. When two similar buildings sit side by side and one has lower dues, your instinct says bargain. The arithmetic usually says the opposite. A building that charges too little is not cheaper — it is borrowing from its own roof.
The bill arrives later as a “special assessment”: a surprise five-figure invoice from the association, due on a schedule you do not control, at whatever moment the elevator or the plumbing gives out. For a 40-year-old with a paycheck, that is a bad surprise. For a 70-year-old on a fixed income, it can break the plan.
This is the same lesson as last week’s HOA story, where association foreclosure filings were up 40%: the association’s finances are your finances. You can be current on your mortgage and still be sunk by your building.
The homework
Before buying any condo — and once a year in any condo you own — read the reserve study. Look for three things. When was it last done? Older than three years is a shrug, not an answer. What percent funded are the reserves? Closer to 100% is better; under 70% deserves questions; 30% short is a red flag with a lobby. And are any big components — roof, elevators, facade — due within ten years with no money set aside?
Then ask the board directly: any special assessments discussed, planned or feared? Their reaction is data too.
A well-run building with honest dues is one of the best retirement housing deals in America — someone else shovels, someone else fixes, the costs are pooled and planned. Just make sure the price on the sticker is the actual price. The granite is visible from the doorway. The roof fund takes reading.