What single-entity ownership is
Single-entity ownership is the number of units in a project held by one owner. That owner can be an individual, a company, a limited liability company, a partnership, a trust, an investment fund, or the developer holding units it has not sold. The test is not who the owner is or how respectable they are. It is how much of one building sits in one pair of hands.
This is a different test from investor concentration, and confusing them is the most common error on the subject. Investor concentration counts units that are not principal residences, spread across however many separate owners. Single-entity ownership counts units controlled by one owner. A project can be 70 percent investor-owned across 70 landlords and pass this test comfortably; a project can be 25 percent investor-owned and fail it because one company holds all of those units.
Three things concentrate when ownership does. Assessment revenue: a large share of the association's income depends on one payer, and if that payer stops paying, defaults on their own financing, or enters bankruptcy, the shortfall is immediate and the remaining owners absorb it. Voting control: a holder of a substantial block can influence or control board elections, budgets, reserve funding decisions, rental rules and whether the association pursues a claim against a builder. Sale pressure: a single holder who decides to liquidate puts a large number of units on the market at once, which is a value event for every other owner.
None of that is a moral judgement about large owners. It is a statement about correlated risk. Spread across many owners, the same risk is diversified; concentrated in one, it is not.
The published limits, and their dates
Fannie Mae publishes its limits as a table, and they are the clearest numbers available on this topic anywhere. As published in the Selling Guide topic on ineligible projects, version dated 5 August 2026:
- Projects of 5 to 10 units, including where the project forms part of a master association — a maximum of 2 units held by a single entity.
- Projects of 11 to 20 units — a maximum of 2 units.
- Projects of 21 units or more — a maximum of 20 percent of the units.
- Co-operatives — a maximum of 20 percent of the stock or shares.
Note the structure. Below 21 units the limit is expressed as a count, not a percentage, and the arithmetic consequence catches people out: two units in a five-unit project is 40 percent and permitted, while two units in a 21-unit project is under 10 percent and also permitted, but five units in a 21-unit project is just under 24 percent and is not. The step from a count to a percentage happens at 21 units and nowhere else.
The second thing to understand is where this rule sits. It is not a scoring factor or a risk layer to be offset by a larger deposit or a stronger borrower. It appears in the list of ineligible project categories — the same list that carries timeshares, condotels, projects in need of critical repairs, and projects under an evacuation order. A project over the limit is ineligible, and the borrower's credit profile is irrelevant to that determination.
Third, and worth stating plainly because 2026 moved so much else: Fannie Mae's March 2026 lender letter did not touch this rule. It retired the investor-concentration limit and it raised the replacement-reserve minimum with effect from January 2027. Single-entity ownership survived intact and appears in the Selling Guide topic published on 5 August 2026.
What the other rulebooks say, and what they do not print
The honest answer for the other three rulebooks is that no reliable published number exists, and saying so is more useful than repeating one.
Freddie Mac. A single-entity ownership limit exists in Chapter 5701 of the Single-Family Seller/Servicer Guide, but the Guide site blocks automated retrieval and Freddie Mac's publicly available fact sheets and frequently asked questions do not print the figure. Numbers attributed to Freddie Mac on this point circulate widely; none of them could be traced to a Freddie Mac publication. Ask the lender to read the current section rather than relying on a secondary table.
FHA. Form HUD-9992, the FHA condominium project approval form, revised 25 February 2025, asks whether any single owner owns more than one unit and requires compliance with "the FHA requirement" — deferring the cap to Handbook 4000.1 without printing it on the form. The figure commonly republished for FHA is not confirmed by any HUD document that publishes it openly. A lender running an FHA project review has the handbook; a buyer reading an article does not.
VA. VA's condominium regulations at 38 CFR 36.4360 to 36.4362 contain no ownership-concentration percentage. VA's approval is a legal review of the declaration, bylaws and enabling documents. Concentration of ownership is not among the things those sections measure. This is one of several places where VA's silence is the answer rather than a gap in the research.
What follows practically is that Fannie Mae's table is the one usable public benchmark. Treat it as the shape of the rule across the market rather than as a rule the other three agencies share.
How a buyer finds out
The question reaches the lender through the condominium project questionnaire, which asks the association how many units are owned by a single owner and their affiliates. As with every questionnaire item, the answer is only as good as the association's records.
Four practical checks, in ascending order of effort:
- The owner roster. Associations maintain one for assessment billing. Reading it for repeated names, repeated mailing addresses and repeated entity suffixes surfaces most concentration in a few minutes.
- The county property records. Ownership of each unit is public. This is the authoritative source and it does not depend on the association answering anything.
- Board and membership meeting minutes. Bulk purchases, bulk sales, a large owner seeking a rules change, or a proxy fight over board seats all leave traces in minutes long before they appear on a form.
- The delinquency schedule. Where a large holder is behind, the delinquency figure and the concentration figure are the same problem described twice.
The hard case is affiliated entities. Several units held by several differently named limited liability companies that share a manager, a registered agent or an address may or may not be a single entity for this purpose, and the answer turns on the ownership structure rather than on the names. An association counting distinct names on a roster will report a lower figure than a reviewer looking through to control. This is the reason a project can pass its own questionnaire and fail a lender's review.
Two specific situations deserve attention. In a project still selling out, the developer's unsold units count, which is one reason new projects and developer-controlled projects are reviewed under separate standards. And in a project that suffered a wave of foreclosures, a single institution or investor can have accumulated a block quietly, without any transaction the association had reason to notice.
What people get wrong
"Fannie Mae dropped the concentration rules in 2026." It dropped one of them. The 50 percent investor-concentration limit was retired on 18 March 2026. The single-entity limits were not. Any summary of the 2026 changes that treats them as a single relaxation is wrong, and the distinction is precisely the sort of thing that surfaces two weeks before closing.
A large institutional owner is not a defect in itself. A well-capitalised owner who pays assessments on time, maintains their units and votes for adequate reserve funding can be the most reliable payer in the building. The rule is about the concentration of the exposure, not the character of the owner. A buyer told that the presence of a large landlord is itself a red flag has been misinformed.
The limit is not a percentage in a small project. Below 21 units it is a count of two, whatever proportion that represents. In a five-unit or seven-unit project — and there are a great many of those — the effective percentage is high and it is still permitted.
Fixing it is not within the association's power. An association can raise its reserve line, complete repairs, buy conforming insurance or settle a lawsuit. It cannot make an owner sell units. This is one of the few conditions on this site where there is no route from a finding to a fix that the association controls, and buyers should hear that early rather than late.
It is not permanent either. Concentration falls as units are sold, and a project that fails today can pass in a year with no change to anything else. Where a large holder is actively selling down, the timing question is worth asking.
What to do about it
Ask the lender to run the project early. Concentration is invisible on a walkthrough and undetectable in the physical condition of the building. It surfaces in a project review, and since the abbreviated review paths ended on 3 August 2026 more projects go through a full one. Learning the result in week one rather than week five is the whole of the advice.
Ask the association a specific question, not a general one. "How many units are owned by any single owner together with entities under common control?" gets a different answer from "does anyone own a lot of units here?" If the answer is at or near the threshold, ask whether that holder is current on assessments and whether they hold board seats.
Check the county records yourself. They are public, authoritative and independent of the association's willingness to answer. This is the rare project-level question a buyer can research without a lender's cooperation.
Understand the routes that remain. Where a project exceeds the limits, conventional financing through Fannie Mae is not available for that project until the position changes. What is left is portfolio and non-qualified-mortgage lending, where the lender keeps the loan on its own balance sheet and applies its own project standards rather than the agencies'; the separate FHA and VA rulebooks, which test different things; or cash. Terms on portfolio lending vary by lender and are not published, so compare offers rather than accepting the first characterisation of what is available.
Know the boundary. Whether a group of separately named entities is one owner for this purpose is a question of corporate control, and it is a question for a real estate attorney rather than for a manager or a loan officer. The same is true of any arrangement where a large holder has negotiated rights in the declaration or a side agreement with the association.
Common questions
What is the single-entity ownership limit for a condo?
Fannie Mae publishes the limits as: a maximum of 2 units in projects of 5 to 10 units and in projects of 11 to 20 units; a maximum of 20 percent of units in projects of 21 units or more; and 20 percent of stock or shares in co-operatives. Those figures appear in the Selling Guide topic on ineligible projects, version dated 5 August 2026. Freddie Mac, FHA and VA do not publish a comparable figure in openly available material.
Did the 2026 changes remove the single-entity ownership limit?
No. Fannie Mae's Lender Letter LL-2026-03 of 18 March 2026 retired the 50 percent investor-concentration limit, expanded the waiver of project review to projects of ten or fewer units, and raised the replacement-reserve minimum with effect from January 2027. It did not change the single-entity limits, which appear unchanged in the Selling Guide topic published on 5 August 2026.
Does the developer's unsold inventory count toward the limit?
Units still held by the developer are units held by a single owner, and they sit in the count. This is one of the reasons projects that are not yet fully conveyed are reviewed under separate standards from established ones. Freddie Mac's published dividing line is 75 percent of units conveyed to purchasers other than the developer, together with owner control of the association.
Can several LLCs owned by the same person be treated as one entity?
The question turns on control rather than on the names on the deeds, and it is a legal question rather than an administrative one. An association counting distinct names on its roster may report a figure lower than a reviewer looking through to common control would reach, which is how a project passes its own questionnaire and fails a lender's review. Where the structure is complicated, this is a question for a real estate attorney.
Can anything be done if a project exceeds the limit?
Not by the buyer or the association. Unlike reserve funding, insurance, delinquency or deferred repairs, this condition cannot be cured by anything the association decides to do; it changes only when the concentrated owner sells units. What remains is portfolio or non-qualified-mortgage lending, where the lender keeps the loan rather than selling it, the separate FHA and VA rulebooks, or cash.
Is a professional landlord owning units a bad sign?
Not in itself, and this is worth saying because buyers are frequently told otherwise. A well-capitalised owner who pays on time and supports adequate reserve funding can strengthen an association. The published rule addresses concentration of financial and voting exposure in one party, not the quality of that party. The follow-up questions that matter are whether the holder is current on assessments and how many board seats they influence.