Moving Communities Forward
Official Publication of Advance HOA Management, exclusively for board members
Board Newsletter | Issue 12
Published October 2026
2026 Mortgage Lending Changes
What HOA Boards Need to Know
Why Fannie Mae, Freddie Mac and FHA Changes Matter to Your Community
Homeowners may be surprised to learn that an HOA or condominium association's financial health, insurance coverage, reserves, and maintenance records can affect an owner's ability to obtain or refinance a mortgage.
In 2026, Fannie Mae and Freddie Mac made significant changes to condominium project requirements, with an increased focus on reserves, deferred maintenance, critical repairs, insurance, and project financial health. FHA also has separate condominium requirements administered by HUD.
While these are not new HOA laws, they can have a practical impact on Colorado communities and their homeowners.
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A Greater Focus on Reserves and Long-Term Planning
One of the most important developments is the increased emphasis on adequate reserve funding. Fannie Mae announced that its replacement-reserve allocation requirement for capital expenditures and deferred maintenance will increase from 10% to 15% of annual budgeted assessment income when the Full Review process is used. The new requirement applies to loan applications dated on or after January 4, 2027. Freddie Mac has also adopted enhanced reserve requirements. For mortgages with application dates on or after August 3, 2026, when a reserve study is being used as an exception to the reserve requirement, the baseline funding methodology can no longer be used, and the highest recommended funding level in the reserve study must be used.
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Insurance Requirements Adapt to Market Realities
Fannie Mae and Freddie Mac also made meaningful adjustments to property insurance requirements in response to rising premiums and limited availability in many markets.
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Key updates include:
• Elimination of strict replacement cost documentation requirements.
• Removal of the requirement to insure roofs at full replacement cost (CCIOA requires full replacement cost basis, less applicable deductibles).
• Greater flexibility in how coverage sufficiency is determined.
For condominium associations:
• The inflation guard requirement has been removed.
• A new maximum deductible of $50,000 per unit will apply beginning July 1.
At the unit level:
• Owners must carry insurance (usually in the form of an H06 policy) when gaps exist in the master policy or when deductibles apply.
• Coverage must align with either interior exposure or the master policy deductible.
These changes acknowledge the challenges associations face in today’s insurance market, while still maintaining a baseline of protection. However, the new deductible cap may create compliance challenges for communities currently carrying higher deductibles.
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Critical Repairs and Building Condition
Fannie Mae and Freddie Mac have also placed significant emphasis on the physical condition of condominium projects. Lenders may need information concerning:
• Structural problems;
• Significant deferred maintenance;
• Critical repairs;
• Building inspections;
• Engineering reports;
• Safety concerns;
• Regulatory inspections; and
• Special assessments associated with repairs.
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Freddie Mac specifically states that information concerning critical repairs, material deficiencies, significant deferred maintenance, and special assessments may come from HOA meeting minutes, financial statements, engineer's reports, and other association records.
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What Should your HOA, in partnership with Advance HOA Management Do?
1) Review your reserve study and funding levels. As part of the 2027 budgeting process, all managers have been informed to consider the minimum reserve allocation of 15% of annual budgeted assessment income.
2) Evaluate your insurance coverage and deductibles. Work with the insurance broker to ensure association's insurance policies, deductibles, coverage limits, and supporting documentation are current.
3) Maintain all records related to major repairs.
4) Maintain all records related to special assessments for capital repairs/replacements.
It is not the board’s responsibility to guarantee that every unit will qualify for a particular mortgage program. Rather, boards should focus on responsible reserve planning, adequate insurance, timely maintenance, and accurate records.
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This article is provided for general educational purposes and is not legal, financial, or mortgage-lending advice. Fannie Mae, Freddie Mac, FHA, and HUD requirements are subject to change. Associations should consult appropriate professionals regarding their specific circumstances.
Say it Ain't Snow
Preparing Your Community for Snow Removal
Snow season is upon us! As Colorado communities prepare for winter weather, a little planning can go a long way toward helping Associations manage snow removal effectively, communicate expectations with homeowners, and reduce potential risk. The following considerations can help Boards prepare for the upcoming snow season.
Confirm Responsibility and Scope
Begin by reviewing the Association’s governing documents to determine the Association’s responsibility for snow and ice removal. Understanding and consistently following those responsibilities is an important part of effective community management and risk management.
Once responsibilities are established, work with your snow-removal vendor and management team to determine appropriate service standards for the community. This may include establishing trigger depths for different areas of the property. For example, a community may establish different service thresholds for sidewalks, parking areas, and streets (such as 2” for sidewalks and 4” for streets). These should be based on the needs and characteristics of the community and the terms of the Association’s contract.
It is also important to identify appropriate locations for snow storage before the season begins. If the community utilizes ice-melt buckets, confirm their locations with the vendor and establish expectations for monitoring and refilling them.
Your snow-removal vendor can also help identify areas that may require additional attention, such as shaded areas where snow and ice may linger, drainage areas where water can refreeze, steps, slopes, and other areas that may present additional winter-weather concerns.
Understand Liability and Risk
Snow and ice removal involves unique liability considerations. Boards should carefully review their snow-removal contracts and understand how the contract addresses services, response expectations, and liability.
Colorado law places limitations on certain liability and indemnification provisions in snow-removal and ice-control contracts under specific circumstances. Because the application of these provisions can depend on the language and circumstances of the contract, Associations should work with association counsel, where appropriate, to review contract provisions and risk-allocation requirements.
Boards should also discuss the Association’s insurance coverage with its insurance broker. Understanding the Association’s coverage, deductibles, reporting requirements, and claims procedures before a winter-weather incident occurs can help the Association respond appropriately if a slip-and-fall or other claim arises. Colorado's Legislative Council identifies liability coverage for common elements as an important component of HOA insurance.
Manage Homeowner Expectations
Communication with homeowners is an important part of a successful snow-removal program.
Before the first major storm, consider providing homeowners with information about the Association’s snow-removal procedures, including:
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General snow-removal trigger depths and service expectations;
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Snow-storage locations;
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Ice-melt bucket locations, if applicable;
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Areas that may require additional caution;
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How and when to report snow or ice concerns; and
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Reminders regarding homeowner responsibilities under the Association’s governing documents.
During significant storms, continue to communicate with homeowners as appropriate. Remind residents that snow-removal operations may require multiple visits during a major storm and that service timing may vary depending on snowfall, weather conditions, access, and the number of communities being serviced by the vendor.
It is also important to remind homeowners that winter weather creates inherent hazards. Residents should use appropriate caution when walking on snow or ice and should take extra care on exterior stairs, slopes, sidewalks, and other areas exposed to the elements.
Budget for Winter Weather
Snow-removal expenses can be difficult to predict because weather conditions are unpredictable. Nevertheless, Boards should ensure that the Association has adequately budgeted for snow and ice removal services.
Many snow-removal contracts are based, at least in part, on time and materials. Boards should understand how the Association's contract establishes service rates, trigger depths, deicing charges, and any other applicable fees.
Trigger depths can also affect both cost and service expectations. A lower trigger depth may result in more frequent vendor mobilization and potentially higher costs, while a higher trigger depth may reduce the number of routine service visits but could affect the timing or order in which a vendor services properties during a significant storm. The actual impact will depend on the Association’s contract and the vendor’s operations.
Boards should carefully consider these factors when establishing the Association’s snow-removal budget and negotiating contract terms. The goal should be to establish a snow-removal program that appropriately balances the community’s needs, safety considerations, service expectations, and available resources.
Before the First Snow
A few simple steps before winter arrives can help the Association start the season prepared:
Review. Confirm the Association’s snow-removal responsibilities and review the current contract.
Plan. Identify snow-storage areas, potential problem areas, and ice-melt locations.
Communicate. Provide homeowners with clear information about snow-removal procedures and how to report concerns.
Budget. Confirm that adequate funds are available for anticipated snow and ice removal expenses.
Coordinate. Make sure the Board, management team, and snow-removal vendor understand their respective roles and expectations.
Colorado winters can be unpredictable, but advance planning and clear communication can help Boards and Associations navigate the snow season more effectively.
Who Does What?
Understanding the Roles of the Board and Community Manager
Effective community management is a partnership between the Board of Directors and the Association's management team. One of the most important elements of that partnership is understanding who is responsible for making decisions, who is responsible for implementing those decisions, and how the Board and community manager can work together most effectively.
While responsibilities can vary based on an Association's governing documents and management agreement, the following provides general guidance for understanding the respective roles.
The Board: Setting Direction and Making Decisions
The Board of Directors is responsible for governing the Association and making decisions on behalf of the community. Board members are elected by the homeowners and have a fiduciary responsibility to act in the best interests of the Association.
Examples of Board responsibilities generally include:
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Establishing the Association's goals, priorities, and policies;
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Approving the annual budget and financial priorities;
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Approving contracts and significant expenditures;
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Establishing and enforcing Association policies in accordance with the governing documents;
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Making decisions regarding major repairs, capital improvements, and community projects;
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Determining the Association's approach to long-term maintenance and planning;
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Providing direction to the management team; and
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Making decisions that require Board approval under the governing documents or applicable law.
The Board does not need to manage every day-to-day detail of the community. In fact, one of the benefits of professional management is allowing the Board to focus on governance, while the management team handles the day-to-day implementation of Board decisions.
The Manager: Implementing and Coordinating
The community manager serves as the Board's management partner and is responsible for carrying out the Association's business in accordance with the governing documents, Board direction, and the management agreement.
Depending on the services included in the Association's management agreement, the manager may:
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Coordinate routine maintenance and repairs;
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Communicate with homeowners and vendors;
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Obtain proposals and coordinate vendor services;
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Prepare information for Board consideration;
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Monitor Association operations and identify issues requiring Board attention;
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Assist with Board meetings and prepare meeting materials;
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Coordinate financial and accounting processes;
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Facilitate covenant enforcement procedures;
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Coordinate resale and disclosure requirements;
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Assist with Association communications;
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Track projects and follow up with vendors; and
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Provide recommendations and information to help the Board make informed decisions.
A manager's role is generally to facilitate, coordinate, advise, and implement—not to independently make decisions that belong to the Board.
Where the Partnership Matters Most
The best results occur when the Board and manager clearly understand their respective roles.
For example, if a community needs a major project completed, such as an asphalt project, the board and manager should identify up front who will be responsible for what in overseeing the project. Will the board want to inspect the work? Will the manager be asked to make additional site visits to track the work? Will the project need a third-party consultant to oversee the project? Addressing these questions upfront will help the project run more smoothly.
For most projects, the manager may help obtain proposals, coordinate vendor communication, provide information to the Board, and assist with project administration. The Board, however, may need to determine the scope of the project, approve the expenditure, select the contractor, meet contractors on site and establish the overall direction. The manager must partner with the board in ensuring the work is conducted according to scope.
Similarly, if an owner raises a maintenance concern, the manager may investigate the issue, determine whether it falls within the Association's responsibilities, coordinate the appropriate response, and keep the Board informed when Board involvement is needed.
This division of responsibilities allows the manager to use their time efficiently while ensuring that the Board retains appropriate oversight and decision-making authority.
Helping Your Manager Prioritize
A community manager may have many issues competing for attention at any given time. Boards can help their manager be more effective by establishing clear priorities.
Consider:
What requires Board action?
Identify decisions that need Board approval and provide timely direction.
What can the manager handle?
Allow the manager to manage routine operational matters within the authority provided by the management agreement and Board policies.
What is urgent?
Clearly distinguish emergencies and time-sensitive matters from routine requests.
Who owns the project?
For larger projects, establish whether the Board, manager, committee, or third-party consultant will be responsible for various aspects of the project.
What are the desired outcomes?
Clear expectations help the manager understand what the Board is trying to accomplish and how best to support that goal.
A Successful Partnership
Professional community management works best when the Board and management team function as partners, with each understanding and respecting the other's role. The Board provides leadership, direction, oversight, and decision-making. The management team provides expertise, coordination, communication, administration, and implementation.
Neither role operates effectively in isolation. When Boards provide clear direction and managers have the authority and resources to carry out that direction, the Association is better positioned to operate efficiently and serve its homeowners.
When in doubt about who should handle a particular issue, start with the Association's governing documents and management agreement, and then communicate with your community manager. A quick conversation at the beginning of an issue can often prevent confusion later.
Working Together Makes the Difference
The goal of professional management is not for the manager to do everything for the Association. The goal is to create a partnership in which the Board governs, the management team manages, and everyone understands how they contribute to the success of the community.
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The Management Fee Matrix
How Much Time Should I Expect Our Manager to Commit to Our Community?
Community managers are assigned a portfolio of communities, and each portfolio is carefully evaluated to ensure that the overall workload is reasonable and allows managers to effectively serve their communities.
When determining portfolio assignments, Advance HOA Management considers a variety of factors, including the number of units, age and type of the community, whether the community includes single-family homes, condominiums, townhomes, or a metro district, invoice volume, homeowner communication, Board meeting frequency, community location, and other operational considerations.
The management fee is also based on many of these same characteristics and helps establish the anticipated level of management involvement for the community. Because a community manager typically serves multiple communities, successful community management relies on a strong partnership between the manager and the Board. Clear priorities, timely Board decisions, and appropriate delegation of responsibilities help ensure that the manager's time is focused on the community's most important needs.
Understanding Manager Time
A good rule of thumb is the manager allocates approximately 3 hours per $1000 of management fees. This is general, directional guidance regarding the average amount of direct manager time that may be devoted to a community based on its monthly management fee. Actual time spent may vary from week to week depending on the needs of the community, Board activities, homeowner matters, projects, seasonal demands, and other circumstances.
It is also important to remember that the monthly management fee includes many services beyond the community manager's direct time, including accounting services, resale facilitation, covenant enforcement, software, administrative support, and other services provided by the Advance HOA Management team.
Special Projects and Additional Services
Projects outside the Association's standard operating functions may require additional time and involvement from the assigned manager. Examples may include fencing projects, tree replacement, painting, asphalt work, major landscaping projects, or other capital improvement projects.
Depending on the scope of the project, additional fees may apply for project-related management time, site visits, or other services outside the standard management agreement. Any potential additional fees should be discussed as part of the project planning process so the Board and management team can establish expectations, responsibilities, timelines, and costs before work begins.
Board members may choose to take on certain project oversight responsibilities. For projects that are particularly complex or outside the expertise of the Board and/or assigned manager, the Association may also benefit from engaging a qualified third-party consultant or project manager.
Partnering for Success
The most effective community management occurs when the Board and management team work together to establish priorities and clearly define responsibilities. The time guidelines above can be a helpful reference when assigning projects, establishing priorities, and setting realistic expectations for the manager's involvement. The goal is not simply to measure hours, but to ensure that the manager's time and the Association's resources are focused on the community's highest priorities.
If you have questions about your community's management services, priorities, or the appropriate allocation of your manager's time, please reach out to your community manager.
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