Buying a Condo? Getting Approved Is About More Than Just You.

Buying a condominium can be a great option, whether you’re purchasing your first home, downsizing, buying a second home or investing.

But financing a condo is different from financing a traditional single-family home.

When you buy a condo, there can actually be two approvals:

1. You need to qualify for the mortgage.
2. The condominium project may also need to qualify.

That second approval is where condo financing can get complicated.

Why Does the Condo Project Matter?

When you purchase a condo, you aren’t just buying the space inside your unit. You are also becoming part of an association that is responsible for maintaining and insuring the buildings and common areas.

Because of that, lenders may need to evaluate the financial and physical condition of the entire condominium project.

Depending on the loan and project, this can include reviewing:

• The condominium association’s budget
• Money being set aside for future repairs and replacement reserves
• Master insurance coverage
• Special assessments
• Owners who are behind on HOA dues or special assessments
• Deferred maintenance and major repairs
• Structural or engineering reports
• Pending litigation
• Commercial space within the project
• Ownership and project characteristics
• The condominium’s governing documents

A buyer can have excellent credit, plenty of income and a large down payment and still run into financing problems if the condominium project doesn’t meet the requirements of the loan program.

Condo Financing Rules Changed in 2026

Fannie Mae and Freddie Mac made significant changes to condominium financing requirements in 2026.

One of the biggest changes is the elimination of the simplified Limited Review/Streamlined Review process for loan applications beginning August 3, 2026.

As a result, many established condominium projects that previously qualified for a less extensive review may now require a Full Review, unless the project or transaction qualifies for an available exemption or waiver.

A Full Review means the lender takes a much closer look at the condominium association and project.

This makes it more important than ever to investigate condominium eligibility early in the homebuying process.

Condo Reserves Are Becoming Even More Important

Another major change involves the amount condominium associations are expected to budget toward replacement reserves.

For applicable Full Reviews, the minimum annual budget allocation toward replacement reserves increases from 10% to 15% beginning with loan applications dated January 4, 2027.

A qualifying reserve study may provide another way to demonstrate adequate reserve funding, but it must meet specific requirements.

Why does this matter to you?

An association that isn’t adequately preparing for future repairs may create financing problems for buyers and potentially greater financial risk for existing owners.

What Can Make a Condo Difficult to Finance?

There isn’t one simple definition of a “bad” condominium project.

Potential financing issues can include:

• Insufficient reserves
• Significant deferred maintenance
• Critical repairs or structural concerns
• Inadequate master insurance
• Excessive HOA or special-assessment delinquencies
• Certain types of pending litigation
• Problematic special assessments
• Too much commercial space in certain projects
• Governing documents that don’t meet lending requirements
• Hotel-like or short-term occupancy characteristics
• Other project-specific eligibility issues

Some issues may make a project ineligible for conventional financing, while others may simply require a different loan program.

That’s why an experienced condominium lender matters.

Warrantable vs. Non-Warrantable Condos

You’ll often hear lenders describe condominiums as either warrantable or non-warrantable.

A warrantable condo generally meets the applicable requirements for conventional financing through Fannie Mae or Freddie Mac.

A non-warrantable condo has one or more characteristics that prevent it from meeting those conventional requirements.

Non-warrantable does not necessarily mean unfinanceable.

We have financing options specifically designed for condominium projects that don’t meet traditional Fannie Mae or Freddie Mac requirements.

Rates, down payment requirements and loan terms can be different, but a conventional condo denial doesn’t necessarily mean the transaction is over.

Don’t Wait Until the End of the Transaction

One of the biggest mistakes buyers and Realtors can make is waiting until late in the mortgage process to find out whether a condo project qualifies.

Whenever possible, we want to identify potential project issues early.

If you’re considering purchasing a condominium, contact us before you make an offer or as early in the process as possible.

If we have previously reviewed the project, we may already have useful information. If not, we can explain what documentation may be needed and what potential issues we want to investigate.

A Special Note About Florida Condominiums

Florida condominium financing deserves additional attention.

Changes involving structural inspections, reserve requirements, insurance costs and association budgets have made it especially important to understand the financial and physical condition of a condominium project before purchasing.

That doesn’t mean you should be afraid of buying a Florida condo.

It means you should know what you’re buying and work with people who understand condominium financing.

Already Been Told Your Condo Doesn’t Qualify?

Get a second opinion.

We work with both warrantable and non-warrantable condominium financing and have experience finding solutions for projects and borrowers that don’t fit neatly into traditional lending guidelines.

Sometimes the problem isn’t the condo.

Sometimes you simply need a different financing strategy.

Buying or Selling a Condo? Let’s Look at It Early.

Whether you’re a buyer, current condo owner or Realtor, we’re happy to help evaluate the financing options available for a condominium project.

The earlier we identify potential issues, the more options we may have to address them.

Contact us to discuss your condominium financing options.

FOR REALTORS: Help Us Review the Condo Early

If you’re listing or selling a condominium, having project information available early can help identify financing issues before they become closing problems.

Depending on the transaction and required project review, we may request:

• Current condominium/HOA budget
• Condo project questionnaire
• Master insurance information
• Reserve study, if applicable
• Information regarding special assessments
• Recent structural, engineering or inspection reports, when applicable
• Governing documents and amendments
• Additional project documentation based on the type of review

The exact documentation required will depend on the project, loan program and type of review.

Have a condo listing you’re concerned about? Contact us before you have a financing problem.

We can help you better understand how the project’s characteristics could affect your buyer’s financing options.

All rates, terms and programs are subject to change without notice. All loans are subject to credit approval. Condominium project eligibility and documentation requirements vary by loan program, transaction and project characteristics.