Find out what financing works on your condo before you list it.
Before a lender can fund a conventional loan on a condo, the whole complex has to pass a project review, not just the unit. As of August 3, 2026, that review is a full review for nearly every established complex, and the paperwork takes time.
By Debbie Marcoux, NMLS #237926, with JMJ Financial Group, NMLS #167867. Rules as of Fannie Mae Lender Letter LL-2026-03. Last updated .
Why do condo deals die three weeks into escrow?
Condo deals usually die in escrow because the complex, not the unit, fails the lender’s project review once the HOA documents finally arrive, and the buyer does not have the down payment to switch programs. Condos are the hardest property type to finance right now, and 2026 made it harder. Fannie Mae and Freddie Mac rewrote the rules for conventional condo loans this year, and the changes land in stages through early 2027. I have spent my career getting condo complexes approved, and I would rather help you get ahead of these rules than watch another sale fall apart. Here is the pattern I see over and over.
A condo goes pending.
The escrow or title order opens, and somebody finally orders the HOA document package.
Three weeks in, the documents arrive.
The lender reviews the complex, and the answer is no: open critical repairs from a balcony inspection, an insurance shortfall, reserves nowhere near the requirement, or the complex is already on the unavailable list.
The buyer cannot switch programs.
The buyer does not have enough down payment to switch to a program that allows it. The escrow cancels and the unit goes back on the market.
Pending, then active again.
Every agent knows what happens next. When a listing goes pending and comes back active, the first thing buyers assume is that something is wrong with the property. It sells, but it takes longer the second time.
All of that was avoidable: the HOA documents were going to be ordered and paid for anyway. The only thing that changed was when.
“But the unit we are selling has no problems.”
I hear this constantly from agents, and it does not matter. If a balcony report calls out critical repairs anywhere in the complex, the lender has to prove every one of them was completed before Fannie Mae or Freddie Mac will finance any unit in it.
What changed for condo loans in 2026, and when?
Conventional condo project rules changed in stages under Fannie Mae Lender Letter LL-2026-03, issued March 18, 2026, and Freddie Mac followed with a parallel bulletin, so the two mirror each other. This applies to conventional loans only. FHA and VA condo rules were not changed by this letter. Here are the dates that matter.
Investor cap removed, small-project waiver widened, insurance loosened.
The 50 percent investor-concentration limit was removed, so a complex with a lot of rentals is no longer declined on that basis alone. The small-project review waiver expanded from complexes of four units or fewer to complexes of ten units or fewer, as long as the complex is not already on Fannie Mae’s unavailable list. Several insurance requirements were also loosened, including the replacement-cost and inflation-guard rules, and lenders can now accept an insurer’s statement in place of some paperwork.
Deductible rules changed.
The 2026 changes limit the deductibles on the master policy and on a unit owner’s HO-6 policy. A high master-policy deductible can now require the buyer to carry an HO-6 policy even when the HOA’s policy covers the inside of the unit. I walk through the limits and their dates on my July 16, 2026 episode.
The Limited Review was retired.
For an established complex, every conventional condo loan now needs a Full Review of the project, regardless of the buyer’s down payment, unless the complex qualifies for the small-project waiver. The reserve-study standards tightened on the same date: budgets that show a reserve balance steadily draining toward zero are no longer acceptable.
The minimum reserve allocation rises from 10 percent to 15 percent.
The minimum reserve allocation in an HOA budget rises from 10 percent to 15 percent of annual budgeted assessment income. A complex can qualify with less only if it has a professional reserve study and is funding at the highest level that study recommends. Getting a budget changed takes a reserve study, an HOA meeting, and a vote, so a complex that waits until January will already be late.
In short, Fannie Mae Lender Letter LL-2026-03 moved conventional condo lending in two directions at once. On March 18, 2026 it removed the 50 percent investor-concentration limit, widened the small-project waiver to complexes of ten units or fewer, and loosened several insurance requirements. On August 3, 2026 it retired the Limited Review, so an established complex now needs a Full Review, and it tightened reserve-study standards. On January 4, 2027, the minimum reserve allocation in an HOA budget rises from 10 percent to 15 percent of annual budgeted assessment income. FHA and VA condo rules were not changed by the letter. The practical effect: Fannie Mae’s list of condo complexes it will not lend on has grown sharply over the last few years, driven by unfinished critical repairs and insurance gaps, and I expect it to keep growing as the reserve rule bites. A condo complex does not find out it is unlendable until a buyer’s lender says no.
What does the readiness review give you?
The Condo Financing Readiness Review gives condo sellers and their listing agents two documents in writing, a Financing Readiness Report and a Financing Availability Letter, before the unit is listed. My team at JMJ Financial Group reviews the complex the same way we would for a live loan file, and tells you, in writing, what financing works on your unit today.
Financing Readiness Report
For you and your listing agent
- The conventional outcome for the complex, and why
- FHA and VA project status
- Fallback options if conventional is not available
- What the HOA could fix to change the answer
Financing Availability Letter
For the listing packet and your buyers’ agents
- States that the complex has been reviewed and approved by JMJ Financial Group for conventional financing through a stated date
- Names what is re-verified at contract
- A buyer who finances through me skips the project-review wait, because the work is already done
What the approval is, and is not. The condo project approval from a Condo Financing Readiness Review is JMJ Financial Group’s internal project approval, not an approval by Fannie Mae, Freddie Mac, FHA, or VA. It covers the whole complex, not just your unit, and it is good for up to twelve months. When a buyer goes under contract, we re-verify only litigation, special assessments and critical repairs, and insurance if the master policy has renewed since the review. Other lenders perform their own project review and may reach a different conclusion. Every buyer still has to qualify individually for their own loan. The approval is not a commitment to lend, and it can change if the complex’s facts change. The Financing Availability Letter names the date the approval runs through and what is re-verified at contract, so buyers’ agents can see exactly what it covers.
Why it helps you sell. A project approval covers the whole complex, not just your unit. A buyer who finances through me skips the project-review wait entirely, because the work is already done. That is a real advantage when you are choosing between offers, and it is why I encourage agents to put the letter in the listing packet.
Selling, buying, or listing a condo?
Selling a condo
The complex, not your unit, decides which loans a buyer can use. If the complex fails review, buyers with small down payments cannot close on your unit no matter how good their credit is. Find that out before you accept an offer, not after.
Buying a condo
You qualify as a borrower, and the complex qualifies as a project. Both have to pass. Ask whether the complex has already been reviewed before you write an offer, and be ready with the fallback if it has not.
Listing agent
A listing with a current project approval is easier to sell and far less likely to come back on the market. Your seller pays only the HOA document fee, you get a letter for the listing, and every offer can be judged against financing that actually works.
Watch the full breakdown of the 2026 condo rules.
My live show of July 16, 2026, walking through every change in Lender Letter LL-2026-03 and every effective date. Figures mentioned in the episode were current as of that date. Read the episode page, with key takeaways, chapters, and a full transcript, or watch on YouTube. More shows: all episodes.
What documents does the HOA need to provide?
The exact list depends on the complex and I will send it to you after intake. Most reviews need:
- The completed HOA questionnaire (lender condo certification)
- The current year’s budget
- The most recent reserve study
- The master insurance certificate
- The delinquency report
- A litigation letter from the HOA or its attorney
Depending on the complex, the review may also call for the CC&Rs, articles of incorporation, recent financial statements, and any balcony or structural inspection report with proof that called-out repairs were completed.
Request a Condo Financing Readiness Review
Sellers and listing agents: fill out the form and I will send you the exact document list to order from your management company. No income, Social Security number, or date of birth is collected here. The review is free; the only cost is the management company’s document fee, which the seller pays directly to the management company.
What happens after you send it
- I send you the exact document list. I tell you precisely what to order from the management company so nothing is ordered twice. The seller orders the package and pays the management company’s fee directly.
- JMJ Financial Group reviews the project. My team reviews the complex against the current conventional guidelines and checks its FHA and VA status.
- You get the Financing Readiness Report. The conventional outcome, why, the fallbacks, and what the HOA could fix. If the answer is no, you still learn exactly which financing will work and how much down payment it takes, so you know which offers you can accept.
- You get the Financing Availability Letter for the listing. Share it with your listing agent and with buyers’ agents. When a buyer finances through me, the project review is already done.
The review is free. There is no charge from me or from JMJ Financial Group. The only cost is the HOA management company’s document fee, paid by the seller directly to the management company. I never handle that payment. When the buyer finances with JMJ Financial Group and pays for those pre-ordered documents as part of the loan, the seller’s document cost is refunded.
Prefer to talk? Book a call or text me at 844-935-3634.
For condo sellers and listing agents. Debbie replies with the exact document list to order from your management company. The review is free; the seller pays only the management company’s document fee, directly to the management company.
Condo financing questions I get asked
What is a condo project review?
Before funding a conventional loan on a condo, the lender reviews the whole complex: its budget, reserves, insurance, litigation, delinquencies, and any critical repairs. The unit can be perfect and the loan can still be declined because the complex does not qualify.
What is the Condo Financing Readiness Review?
A review of your complex that I and my team at JMJ Financial Group do for condo sellers and listing agents before the unit is listed. You get a Financing Readiness Report and a Financing Availability Letter. The review is free; the only cost is the HOA management company’s document fee, which the seller pays directly to the management company.
Does the Condo Financing Readiness Review cost anything?
I do not charge for it and neither does JMJ Financial Group. The seller pays the management company’s document fee directly to the management company, the same fee that would be paid once the unit is in escrow. No money changes hands with me. If the buyer finances with JMJ Financial Group and pays for those pre-ordered documents as part of the loan, the seller’s document cost is refunded.
How long is a condo project approval good for?
JMJ Financial Group’s internal project approval is good for up to twelve months. At contract, we re-verify litigation, special assessments and critical repairs, and insurance if the master policy has renewed. It is not a commitment to lend and can change if the complex’s facts change.
Does the project approval work with any lender?
No. It is JMJ Financial Group’s approval. Other lenders perform their own project review and may reach a different conclusion. A buyer who finances through me skips the project-review wait because the review is already done.
Does a project approval mean my buyer is approved?
No. The project approval covers the complex. Every buyer still qualifies individually on their own credit, income, and down payment.
What if the condo complex does not pass the review?
The report tells you why, what the HOA could fix, and which financing still works on your unit, including FHA or VA if the complex is approved with them, and other programs with larger down payments. Knowing that before you list means you only accept offers from buyers who can actually close.
My unit is fine. Why does a balcony repair elsewhere in the complex matter?
Because the review is of the project, not the unit. If an inspection report calls out critical repairs anywhere in the complex, the lender has to document that all of them were completed before Fannie Mae or Freddie Mac will finance any unit there.
Did FHA and VA condo rules change in 2026 too?
Not under Fannie Mae Lender Letter LL-2026-03. FHA and VA have their own condo approval processes, and a complex that loses conventional eligibility may still qualify with them. Getting a complex FHA or VA approved is its own project, and my team has done many of them.
Get the complex reviewed before the listing goes live.
Questions first? Text me at 844-935-3634. Own a condo and want to use its equity instead? See my HELOC guide or, for retirees, my reverse mortgage guide.
Debbie Marcoux, Mortgage Loan Originator, NMLS #237926. Mortgages are originated through JMJ Financial Group, NMLS #167867, Arizona License #BK0943949. Office: 2150 Kiowa Blvd N, Suite A-108, Lake Havasu City, AZ 86403. Licensed in Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Nevada, North Carolina, Oregon, Tennessee, Texas, and Washington. Verify any license on NMLS Consumer Access.
Equal Housing Opportunity. This page is general education about condominium project eligibility and is not a commitment to lend, a loan offer, a rate quote, or financial, tax, or legal advice. The Condo Financing Readiness Review produces JMJ Financial Group’s internal project approval only; it is not an approval by Fannie Mae, Freddie Mac, FHA, VA, or any other lender, it is subject to change, and it does not approve any borrower. Loans are subject to credit approval; terms and conditions apply. Guideline descriptions on this page summarize Fannie Mae Lender Letter LL-2026-03 and Freddie Mac’s parallel bulletin as of the date of publication and may change. Debbie Marcoux is not a financial advisor; please consult qualified professionals about your individual situation.