07/28/2026
The condo market is already under pressure, and it’s about to face another major shift.
For the first time, beginning August 3, 2026, every conventional condo loan in a building with 10+ units will require a full review of a building’s actual financial health. Up until now, approximately 80% of conventional condo loans have been approved under limited review (meaning no financial review). Moving forward, lenders will now be required to perform a mandatory full lender questionnaire.
That means reviewing:
• HOA financial statements
• Operating budgets
• Reserve funding
• Delinquency rates
• And other key project level risk factors
It’s suspected that approximately 75% of the buildings approved to date under limited review would not pass the new Fannie Mae and Freddie Mac lending guidelines starting August 3rd.
If a building does not receive approval, it may be deemed non-warrantable, making financing much more difficult. Buyers may be limited to cash purchases, hard money loans, or higher cost loan programs through private investors willing to make an exception, reducing the pool of qualified buyers.
For condo sellers, this could mean:
• Longer underwriting timelines
• Greater uncertainty during escrow
• Financing falling through because of the HOA - not the buyer
• Potential challenges for all future building sales if the project loses warrantable status
Some additional condo market trends to know:
📈 Condo inventory has increased more than 80% since mid-2022
🏢 70% of HOAs are underfunded
💰 65% of HOAs have issued a special assessment in the last 5 years or expecting one in the next 5
Whether you’re thinking about buying or selling a condo, understanding your HOA’s financial position is becoming just as important as understanding the property itself. If you’re considering a condo purchase or sale and want to understand how these changes could impact you, I’m happy to help you navigate what’s ahead. Call or text me at anytime.
Chloe de Verrier
Coldwell Banker
📲 Direct: 310.890.9656
📧 [email protected]
