Your Condo Deal Died on the Building, Not the Buyer
Program and regulatory figures verified September 18, 2026. Details change; confirm your scenario with us.
Written for the agent who just got the call on a Friday afternoon. Short version first.
The short version
If a lender declined your condo transaction and pointed at the HOA, the borrower is probably not the problem and sending the file to another conventional lender will produce the same answer. Every agency lender is reading the same project against the same standard.
What changed: as of August 3, 2026 the Limited Review path is gone for projects over 10 units, so the association's budget, reserves, delinquency, insurance, litigation and special assessments are now examined on every loan. Plenty of projects have carried a quiet problem for years without it ever surfacing. Now it surfaces.
What to tell your client
- It is the building, not them. Their credit and income were fine. This is worth saying clearly, because buyers assume they were turned down.
- Another conventional lender will not fix it. The standard is the agencies', not the lender's.
- The unit is often still financeable through a route that does not require project review.
- Timing matters. If the project's issue is the reserve percentage, January 4 makes it worse, not better.
If you are the listing agent
You will find out about this through someone else's lender, usually late. Two things are worth doing before that happens.
Ask the association what its budget allocates to reserves. If the answer is 10%, every conventional buyer after January 4 is a risk to your escrow, and knowing that in advance changes how you price and how you qualify offers.
And know that the pool of conventional-eligible buyers for that building may shrink in January without the building changing at all. That is a pricing input, and you would rather have it in October than in February.
How we can help
Send us the address and what the lender said. You will get a straight answer on whether the unit can be financed and on what terms, including when it cannot. We would rather tell you no quickly than keep a dead escrow alive.
Detail on the terms is at financing a non-warrantable condo, the dated rule timeline is at what changed and when, and the failure reasons are at why projects fail review.
No obligation. Send us the project and the scenario, and you will get a straight answer on whether it can be financed and on what terms, including when the answer is no.
We are a lender. Association budgets, reserve studies and governance decisions belong to the board, its management company and association counsel. What we can tell you is what those decisions do to an owner's ability to finance or sell.
Frequently asked questions
My buyer was approved but the condo was not. What now?
The project failed review rather than the borrower, so re-shopping the buyer to another agency lender will produce the same result. The unit can often still close through financing that does not require a condo questionnaire, to 80% of value on a primary residence at 720 or better credit.
Will this get worse in 2027?
For projects with thin reserves, yes. On January 4, 2027 the required reserve allocation rises from a minimum of 10% to a minimum of 15% of the annual budgeted income assessment. Projects budgeting exactly 10% today fall short in January without anything about the building changing.
What should I ask an association before listing a unit?
What percentage of the annual budget goes to replacement reserves, whether there is a current reserve study and at what funding level, whether any special assessment is pending, and whether the association is involved in litigation. Those are the items Full Review examines.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, accounting or association-governance advice. Agency project standards change; association budgets, reserve studies and governance decisions belong to the board, its management company and association counsel. Loans are subject to borrower and property qualification, and not all projects or borrowers will qualify.