Most lenders have been enforcing the Fannie/Freddie reserves rule--which has actually been on the books for a long time--for the past year. In a nutshell, it states that the association a] must have a budget line item for reserve funds contribution, & b] that it be at least 10% of total budgeted expenses.

There is NO requirement that these funds actually be deposited in reserves.

They do NOT care how much money is actually in reserve accounts, now or historically. [Your reserve could have $10 or $10,000,000; it's not a factor.]

Absurd? Yes...but that's the rule, & exceptions are rare.

The good news is that any banker should be able to tell you up front--before you submit an app or pay a fee, if your building qualifies.

The only time you need not be concerned with this rule is when lenders--typically local &/or small--plan to hold the mortgage in their own portfolio. If they're not reselling, they don't care about Fannie/Freddie rules.