There are important changes you should know about if you’re planning to purchase a condo using a conforming loan. Fannie Mae and Freddie Mac introduced new condo guidelines in mid-March that will make financing more challenging, particularly in larger buildings.
A bit of background: These agencies help keep money flowing in the housing market by purchasing loans from lenders. Their new guidelines are designed to reduce lender risk for loans up to $832,750.
Here’s what’s changing, according to the National Association of Realtors:
Smaller condo projects (10 units or fewer) may now qualify for a waiver of project review. This is especially helpful in markets like San Francisco, where smaller HOAs are common.
The Limited Review process is being eliminated. More properties will now require a Full Review, meaning additional documentation and scrutiny.
There will be higher reserve requirements. HOAs will need to allocate 15% of their annual budget toward reserves (up from 10%) for projects undergoing Full Review, starting in 2027. However, one- to four-unit condo buildings should still be eligible for a project review waiver—though the lender may ask for a letter from the HOA stating that there are no unaddressed significant repairs outstanding.
What this means for buyers and sellers:
• Smaller buildings may benefit from a more streamlined financing process
• Larger buildings will face stricter documentation and reserve requirements, which could lead to higher HOA dues or special assessments
• Lenders will place greater emphasis on HOA financials, including budgets, reserve studies and insurance
• Expect longer loan approval and closing timelines for larger condo projects.
A good rule of thumb: Have your lender review key HOA documents before submitting an offer.
And remember, these guidelines apply to loans up to $832,750.