What counts as a critical repair under Fannie Mae's project rules?

Fannie Mae defines critical repairs by their effect on safety, soundness, structural integrity, habitability, financial viability, or marketability, and lists specific conditions including certain unfunded repairs over $10,000 per unit that should be undertaken within 12 months.

What conditions are listed?

The current Guide includes material deficiencies that could contribute to critical system failure within one year, mold or water intrusion, advanced deterioration, failed mandatory structural or habitability inspections, and the stated unfunded-repair test. That dollar test excludes repairs made by unit owners and repairs funded through a special assessment.

Routine preventative work or normal capital replacement is not critical when it is accomplished within the normal operating budget or through special assessments that are within guidelines. Isolated damage that does not affect the project as a whole may also fall outside the rule.

An unsafe-condition evacuation order makes the project ineligible until the condition is remediated and the building is deemed safe for occupancy. An unremediated critical repair tied to a special assessment also makes the project ineligible under the Guide.

Who decides?

The lender decides which documents are needed and whether the project meets the physical-condition requirements. Standing Check is informational screening, not an engineering opinion, repair clearance, lender approval, or eligibility guarantee.

Sources

• Fannie Mae Selling Guide B4-2.1-03, Ineligible Projects, version August 5, 2026 — Projects in Need of Critical Repairs, routine-repair treatment, special assessments, inspections, and documentation.

Primary source accessed September 11, 2026.