Landfall Pays for Its Gates in Two Layers, and in January Lenders Start Asking More of One of Them

For a mortgage application dated on or after January 4, 2027, Fannie Mae will require a condominium project under Full Review to put at least 15% of its annual budgeted assessment income into replacement reserves. The current minimum is 10%. Freddie Mac announced the same increase in its Bulletin 2026-C, with the same effective date. The cutover is roughly eleven weeks away.

In Landfall, this rule doesn't land on the community as a whole. Every lot owner inside the gates pays annual dues to the Landfall Council of Associations. The community also has 26 individual homeowner associations. The master layer is spending heavily to clear a decades-old maintenance backlog. The lender test applies at the condo layer. A buyer comparing two Landfall homes at similar prices may be taking on different exposure at each layer.

The layer every owner pays into

The Landfall Council of Associations, or LCOA, is responsible for roads, stormwater, sidewalks, streetlights, nature trails, the shared common areas, security patrol, the entrance gates, perimeter fencing, the post offices, gatehouses and bus stops. The Country Club of Landfall is a completely separate entity. It runs the clubhouses, the Drysdale Sports Center and the golf courses. The association's September 2026 snapshot counts 2,058 owned lots paying dues, 1,908 completed homes and 45 homes under construction.

The association's own newsletters describe what those dues maintain as a "$100M infrastructure." Much of it is older than it looks. In the August–September 2026 Landfall Voice, Chief Operating Officer Steve Hughes wrote that Landfall is 41 years old and still has roads that are 35 years old and have never been resurfaced. Standard practice is to resurface every 20 years, or every 15 in high-traffic areas.

Why reserves rose in a year with a $1.9 million paving bill

The board chose to speed up street paving to clear that backlog. The goal is to finish the first repaving of every community road by the end of 2028. After that, roads move to a rotation plan that resurfaces each one every 15 to 20 years based on traffic. Before any paving starts, crews inspect, clean and repair the 23 miles of underground storm drains under it. The Arboretum Drive project was the largest paving and stormwater cleaning job since the community was first built. According to the treasurer's report in that same August–September issue, the board moved it up "to take advantage of current pricing versus increased future costs."

Most associations run their reserves down when they take on work this size. In the October–November 2026 Landfall Voice, Treasurer Kelly Garnett reported $4,194,054.63 in reserves through the end of July 2026. That figure came with a planned $1.9 million expenditure for Arboretum Drive and the rest of the 2026 right-of-way paving program. She projected a year-end balance of $5,285,000, which is $1,315,000 over the budget plan.

So the master layer is paying for a backlog that had built up since the 1980s while its reserve balance grows. For a buyer, that means a large share of Landfall's oldest deferred maintenance is being paid for now, out of funds already collected.

The 2018 bill this program is meant to prevent

The association has explained why it's doing this. Hurricane Florence in 2018 left Landfall with a $3.8 million liability that required a special assessment on all property owners. The finance report in the August–September 2026 Landfall Voice says the community does not want that to happen again "if it can be helped by keeping our Reserves/CIF healthy."

Two other details from the same reports matter to a buyer:

• The ceiling on increases. According to that same August–September issue, Landfall's governing documents allow regular assessments to rise by up to 10% per year. The association says increases have been kept to a minimum for several years, helped partly by profits from its in-house maintenance services.
• The calendar. October is budget month for the 2027 budget, with stated goals of keeping dues increases minimal and avoiding special assessments. The last reserve study was done in 2022, and a new one is budgeted for 2027.

A buyer who closes this winter will own through both of those events. The 2027 budget and the 2027 reserve study are the two documents that will show whether the backlog program stays on schedule.

The second layer, and the January cutover

Below the LCOA are the individual associations. Of Landfall's 26 homeowner associations, 17 contract with Landfall Association Services for administration and accounting. The Treasurer raised the lending change directly. Her report said condo buyers and owners should know about the 10% threshold rising to 15% in 2027, and that "every HOA within Landfall should be looking at their reserves percentages."

The federal rule is narrower than "no reserves, no mortgage." Fannie Mae's Full Review standard, Selling Guide B4-2.2-01, measures the share of the annual budget allocated to replacement reserves. It does not measure the cash a project already holds. Lender Letter LL-2026-03, dated March 18, 2026, raises that allocation to 15% for Full Review applications dated on or after January 4, 2027. It also retired Limited Review for applications dated on or after August 3, 2026. A qualifying reserve study is still an alternative to the percentage test, and the updated policy requires using the study's highest recommended reserve allocation. Fannie Mae's guidelines say the condo crackdown follows a pattern it has seen since 2023: projects with underfunded reserves tend to be the same ones that need critical repairs.

Ordinary planned unit developments are handled differently. Fannie Mae's Waiver of Project Review section waives project review for units in standard new and established PUDs. As a result, the budget-percentage test is a condo-project requirement, not a general rule for every HOA in a gated community.

This is general information about published lender and association rules, not legal, lending or financial advice. Confirm how any rule applies to a specific property and loan with your lender and attorney.

What this does to the price of entry

Pricing at Landfall's top end has held up. The Treasurer's report lists 2026 closings at $7.25 million, $6.5 million and $5.45 million, and homes under contract at $11.6 million and $5.9 million as of that writing. The community's record sale, $7.75 million, closed in 2025. Inventory counts depend on who is counting. Intracoastal Realty broker Vance Young told WilmingtonBiz in September 2026 that Landfall inventory fell from 28 listings to 18 over the summer. The association's own September 2026 snapshot counted 27 homes for sale. Either way, supply is limited.

In the same WilmingtonBiz article, Young said most high-end buyers are paying cash. A cash purchase involves no loan application, so the project-review rule doesn't apply to that closing. It may apply to the next buyer of the same unit, so a condo association's reserve allocation can affect resale even when today's buyer never needs a mortgage. For detached homes, the variables are the master association's 2027 budget and reserve study, and whether the paving and drain program finishes by its 2028 target.

Before writing an offer, a buyer can ask for these:

1. The current and proposed 2027 LCOA budget, and the date the 2027 reserve study is expected.
2. The name of the specific sub-association the property belongs to, out of the 26, and whether it is a condo or a PUD.
3. For a condo or attached unit, the sub-association's current budget showing its reserve line, and any reserve study it relies on.
4. Whether either layer has a special assessment approved or under discussion.
5. The lender's read on project eligibility for an application dated on or after January 4, 2027.

FAQ

Does the 15% rule apply to every home in Landfall? No. Under the Fannie Mae and Freddie Mac announcements, it is a Full Review standard for condo projects. Fannie Mae waives project review for units in ordinary PUDs.

Is Landfall's master association raising dues for 2027? No figure has been published. The October–November 2026 Voice says 2027 budget work is underway, with goals of keeping increases minimal and avoiding special assessments. Increases are capped at 10% per year.

When does the road work end? The association's target is to finish the first repaving of every community road by the end of 2028, then move to a 15-to-20-year rotation.

If you're weighing a Landfall home and want help reading the budget, the reserve figures and the sub-association documents together before you make an offer, Rainey E Wallace can walk you through what each layer shows. Let's Connect.