On March 18, 2026, Fannie Mae and Freddie Mac announced an important update to property insurance requirements for federally-backed mortgages—and it’s one that could directly impact your borrowers, closings, and long-term client satisfaction.

The Big Change: Roof Coverage Flexibility

Historically, homeowners insurance policies for Fannie Mae and Freddie Mac loans required Replacement Cost Coverage on roofs. As of March 2026 that has now changed.

• Replacement Cost is no longer required for roof coverage

• Actual Cash Value (ACV) coverage is now acceptable

This is a significant shift—and one that creates both opportunities and risks.

In recent years, homeowners have faced significant changes in how insurance companies handle roof claims particularly concerning wind and hail damage claims. Many insurers are transitioning from offering Replacement Cost Value (RCV) to Actual Cash Value (ACV) settlements for roofs older than ten years when they are damaged by wind or hail. This shift has substantial implications for homeowners, affecting claim payouts and out-of-pocket expenses for the homeowner.