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Blog posted On April 23, 2026
If you work with condo buyers or sellers, there are some financing changes coming that are worth knowing about now.
A few of these changes may actually make some condo deals easier. But overall, condo financing is going to depend a lot more on the project itself, not just the buyer.
That is the part people need to understand early.
A buyer can be well qualified and the deal may still run into trouble if the HOA budget is weak, reserves are low, insurance is not where it needs to be, or the project has maintenance issues.
What’s Changing?
The biggest change is that limited review is going away for many conventional condo loans.
Right now, some condo loans can be approved with a lighter review process called limited review. That changes on August 3, 2026. After that, most condo loans will require a full project review.
That means more attention will be paid to:
In simple terms, more condo projects are going to get a closer look.
There is some good news too. For smaller condo projects, especially those with 10 units or less, some may qualify for a waiver of project review. That could make those properties easier to finance, as long as they are not part of a larger master association or development.
There are also a couple of other changes that may help in certain situations, including the removal of the old investor concentration limit and the retirement of some Florida-specific review requirements.
So this is not all bad news. Some smaller projects may get easier. But a lot of others are going to get more scrutiny.
Why Are These Changes Happening?
The short version is that the agencies are trying to address underfunded reserves, delayed repairs, and the overall financial health of condo projects.
Whether people agree with every part of the new rules or not, the goal is pretty clear. They want condo associations planning better, saving more, and doing a better job of keeping up with the property instead of kicking problems down the road.
So yes, this may create more work in some transactions. But it is also about making sure condo projects are in better shape over time.
When Do These Changes Take Effect?
There are two main dates to know.
August 3, 2026
This is when limited review goes away for many conventional condo loans.
January 2027
This is when the reserve funding expectation is set to move from 10% to 15%.
That second date is a big one because a lot of associations already have a hard time meeting the current reserve expectation. Going from 10% to 15% is not a small change.
Some HOAs may need to:
There has already been some discussion about whether that jump could be softened or phased in, but for now it is something worth watching.
Which Condo Projects May Be Affected Most?
Not every condo project is going to feel this the same way.
The ones most likely to feel it are:
If a project has been getting by without strong reserves or good paperwork, there is a better chance those weaknesses are going to matter more going forward.
When people talk about low reserves, deferred maintenance, or insurance issues, they are really talking about the overall health of the condo project. Low reserves mean the HOA may not be saving enough for major future repairs. Deferred maintenance means needed repairs are being delayed instead of addressed when they should be. Insurance issues usually mean the project may not have the coverage or structure lenders want to see. Any of those issues can make financing more difficult, even when the buyer is otherwise well qualified.
On the other hand, smaller projects with 10 units or less may benefit from the waiver option and could actually become easier to finance.
What Should Agents Be Watching Now?
Agents do not need to become condo finance experts. But they do need to get better at spotting issues early.
The earlier an agent looks at the project side of the deal and gets a lender involved, the better chance there is of avoiding a surprise later.
A few good questions to ask:
If the condo is older, the HOA seems a little loose, or the project has had financing trouble before, do not wait until the deal is halfway down the road to start asking questions.
Start earlier. The sooner issues come out, the more options there usually are to work through them.
How Does This Affect Buyers?
For buyers, the biggest impact is that not every condo that looks affordable or attractive will be easy to finance.
Some buyers may find that a condo project has fewer conventional options than expected because of weak reserves, poor financials, insurance problems, or project condition.
In some cases, FHA may become the better path, especially where it is more flexible on certain reserve issues.
Buyers may also feel the impact through HOA dues over time if associations need to raise dues to strengthen reserves and stay financeable.
So for buyers, this is not just about income, credit score, and down payment. The condo itself matters too, along with budgeting for possible future HOA increases.
How Does This Affect Sellers?
For sellers, this could affect both timing and marketability.
If a condo project becomes harder to finance, that can shrink the buyer pool or create problems later in the transaction.
A seller may have a willing buyer and still hit a wall if the project documents, reserves, or insurance do not support financing.
That does not mean every condo sale is going to become difficult. It just means sellers and listing agents should be more proactive about understanding the project before they are deep into a deal.
Conclusion
Condo financing is becoming more project-driven. That is really the main takeaway.
The biggest dates to know are August 3, 2026, when limited review goes away for many conventional condo loans, and January 2027, when reserve expectations are set to increase from 10% to 15%.
Some smaller condo projects may get easier to finance. But many others, especially older projects or associations with weak budgets, low reserves, insurance issues, or deferred maintenance, are likely to face more scrutiny.
For agents, buyers, and sellers, the best move is to get ahead of it. Ask better questions earlier. Look at the project sooner. Bring the lender in sooner.
The more you know up front, the better chance you have of avoiding delays, keeping financing options open, and getting the deal to the closing table. And a good lender should have condo-specific resources or a condo team that can help review documents, navigate the guidelines, and give a better read on the overall health of a project.
