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Condo financing guidelines are changing, and knowing what to expect can help borrowers avoid surprises and keep their transaction moving smoothly.
A key change took effect August 3: Fannie Mae and Freddie Mac retired the Limited Review/Streamlined Project Review options. Condo projects must now meet the requirements under the Full/Established Project Review process.
Another change is coming January 1: The minimum reserve budget allocation will increase from 10% to 15%, or higher if required by the community’s reserve study.
What Does This Mean for Buyers?
When financing a condo, lenders may take a closer look at the association’s:
- Financials & Operating Budget
- Reserve Funding & Reserve Study
- Special Assessments
- Major Repairs & Deferred Maintenance
- Insurance Coverage
- Overall Project Condition
- Project Size
These factors can affect whether a condo project qualifies for financing and may create challenges if they aren’t reviewed early.
The Bottom Line: Before falling in love with a condo, it’s important to understand the financial health of the community. Reviewing the project details early can help identify potential issues and prevent surprises later in the loan process.
Have questions about financing a condo? Reach out today — we’re here to help!
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📞 (214) 736-9466