A major federal policy shift is putting millions of homeowners at financial risk just as the most destructive weather season of the year gets underway.
Fannie Mae and Freddie Mac announced on March 18, 2026, that mortgages they back can now use Actual Cash Value roof insurance rather than requiring the costlier Replacement Cost Value coverage.
The change reverses a Biden administration guidance issued in February 2024 that had effectively prohibited ACV-based roof claim settlements on homes carrying Fannie Mae or Freddie Mac mortgages.
The National Association of Mutual Insurance Companies had called that 2024 guidance a de facto regulation that locked homeowners out of more affordable, state-regulated insurance products.
Under an ACV policy, insurers calculate the depreciated value of a roof rather than what it would actually cost to replace it, often leaving a significant gap for homeowners to cover themselves.
If hail damages a roof and replacement costs $10,000, a homeowner with an ACV policy on a 15-year-old shingle roof could receive as little as 40 to 50 percent of that amount, covering the rest out of pocket.
“If they get a hailstorm or tornado, they are going to be in for the surprise of their life when they get that bill from the roofer saying, ‘Hey, your insurance is only covering $9,000, you owe another $9,000 to put a new roof on,'” said Lindsay Frangie, a Georgia-based branch partner at lending firm Alcova Mortgage.
Frangie called the policy change “a Band-Aid on a bullet wound,” expressing doubt that it will meaningfully reduce the overall burden of homeownership costs for most families.
Consumer advocates warn that many policyholders will not even understand their coverage has changed, because some insurance agents “brush off the details,” according to Amy Bach, director of United Policyholders.
Loretta Worters, vice president of media relations for the Insurance Information Institute, cautioned that homeowners should weigh the long-term impact on their claims history before filing a roof claim after storm damage.
Roof-related claims accounted for more than 25 percent of all residential insurance claim value in 2024, with repair and replacement costs reaching nearly $31 billion, a jump of almost 30 percent since 2022, according to data analytics firm Verisk.
Thousands of homeowners in Colorado are already assessing damage after softball-sized hail was reported this week, forcing many to decide between filing a claim or paying for repairs out of pocket.
The national average annual homeowners insurance premium reached $2,948 at the end of 2025, up 12 percent in a single year, and is projected to climb another 4 percent to $3,057 by the end of 2026, according to Insurify.
Rising insurance costs are compounding financial pressure on households already strained by elevated home prices, mortgage rates above 6 percent, increasing property taxes, and the high cost of everyday goods.
The Federal Housing Finance Agency argues the new rule will lower insurance bills for millions of families, particularly in rural areas and older condo buildings where full replacement cost coverage has become scarce or unaffordable.
