If you’re buying, selling, or refinancing a condo right now, there’s a new reality you need to know: lenders are paying even more attention to the building (the condo association/project), not just the borrower.
New condo lending rules tied to Fannie Mae and Freddie Mac guidance go into effect this month, and industry groups like the National Association of REALTORS® have been warning that this can create more documentation, more review, and more delays—especially for buildings that don’t have clean financials, reserve funding, or insurance documentation ready.
The biggest risk isn’t that condos become “impossible.” The biggest risk is this: a buyer finds the right unit, gets pre-approved, and then the loan stalls (or gets denied) because the condo project can’t meet the lender’s requirements in time.
So let’s make this practical.
What’s actually changing
For years, many condo deals could move forward with a lighter-touch review. Under the updated guidance, more condo transactions will require a fuller project review—meaning lenders may need deeper HOA documentation (budget, reserves, insurance, maintenance/repairs disclosures) before they can approve the mortgage.
One widely discussed piece of the update: the “Limited Review” pathway is being retired for many loans, and lenders will be pushed toward Full Review unless the project qualifies for a waiver in certain small-project scenarios.
On top of that, there’s a bigger theme behind all of this: after high-profile building safety issues and rising insurance complexity, the mortgage system is trying to identify condo projects with financial stress, deferred maintenance, or insurance gaps earlier—before they become a surprise to buyers and lenders.
Why this matters in Greater Boston
In our market, condos are a huge part of the entry-level and “right-size” housing supply. When financing gets harder or slower, two things tend to happen:
First, transactions take longer because more people need to provide more documents.
Second, buildings that don’t have organized documentation can suddenly feel “hard to finance,” which can impact buyer demand—even if the building is perfectly livable.
If you’re an owner, this matters even if you’re not selling tomorrow. Financing rules influence liquidity, and liquidity influences value.
What makes a condo “non-warrantable” (and why you keep hearing that term)
“Warrantable” basically means the condo project meets the guidelines a lender needs to sell the loan to Fannie/Freddie. “Non-warrantable” means it doesn’t—and that can limit loan options, increase rates, or require different financing.
Important note: non-warrantable doesn’t always mean “bad.” Sometimes it just means the project doesn’t fit a guideline box (documentation gaps, insurance structure, higher investor concentration, ongoing litigation, or other project-level factors).
The point is: this is often a project issue, not a unit issue.
The practical playbook (to avoid last-minute deal-killers)
If you’re buying or selling a condo this month, here’s what we recommend:
Start the building review early. Don’t wait until the last week of underwriting to find out the HOA can’t produce documents quickly.
Expect more HOA documentation requests. Budget, reserves, insurance, and repair/maintenance disclosures may come up.
Build time into the contract. If you’re in a building that historically moves slowly on docs, timing matters.
Have a backup financing conversation. If the project is flagged as non-warrantable, you want options before you’re already deep into the transaction.
Local note + thank you
A big thank you to Christina Babigian for sharing helpful on-the-ground context on how lenders are approaching condo financing right now. Also thank you to Rockland Trust (RocklandTrust.com)—a bank that allows financing for certain non-warrantable condos, which can be a valuable option when a project doesn’t fit the standard guidelines.
(As always, every loan is scenario-specific—buyers and owners should confirm eligibility directly with their lender.)
The End
Condo financing isn’t “broken,” but it is getting more document-heavy.
If you’re buying, selling, or refinancing a condo, the smartest move this month is to treat the building review as a first-class part of the process—not an afterthought.
Want help thinking through a condo sale or purchase strategy?
If you’re trying to sell a condo (or buy one) and you want a clear plan—pricing, positioning, and how to reduce financing friction—book a free consultation:
Scott Martin with Martin Property Management, LLC:
Schedule: https://calendly.com/scott-martinhomemanagement/real-estate-investors-pm-services
Or Call directly: 617.957.0166