Fannie Mae Says Roofs Must Be Insured, But Not Necessarily at Replacement Cost

Fannie Mae’s updated rules still require roofs to carry insurance, but replacement cost coverage is no longer mandatory for the roof itself. Homeowners should check whether their policy pays replacement cost or a depreciated actual cash value after a covered loss – Shutterstock

A roof still needs insurance if a home has a Fannie Mae-backed mortgage, but Fannie Mae has changed an important detail: the roof no longer needs replacement cost coverage under its updated property insurance requirements. That distinction could matter when homeowners review policies, compare premiums, or discover that a cheaper policy pays for an aging roof differently than expected.

The change appears in Fannie Mae’s March 18, 2026 lender letter updating property insurance requirements for one- to four-unit homes and other residential properties. The new rule sounds simple, but insurance language rarely stays simple for long. A homeowner who sees “roof covered” on a policy should still ask a much more useful question: covered for how much, and under what settlement method?