Episode #293
New Condo Lending Rules: Why Your Buyer Can Qualify But the Condo Doesn’t
Send us Fan Mail New Condo Lending Rules: What REALTORS®, Buyers & Sellers Need to Know Big changes to Fannie Mae and Freddie Mac condo lending rules are here—and they could determine whether a buyer can get financing on a condominium even when the buyer is otherwise perfectly qualified. In this episode of Dishin’ Dirt , I break down the new 2026–2027 condo financing requirements and explain why REALTORS®, condo owners, buyers, sellers, and HOA boards need to start paying much closer attention to the financial and physical condition of the condominium association. A buyer may have excellent credit, strong income, and a conventional loan preapproval—and still have a financing problem because the condo project itself doesn't qualify . We discuss: Why lenders are underwriting the entire condo project , not just the buyer The new 15% HOA replacement-reserve requirement coming January 4, 2027 How the increase from 10% to 15% could affect HOA budgets and dues Why reserve studies are becoming increasingly important ⚠️ How deferred maintenance and critical repairs can affect condo financing What a special assessment really means for a buyer's loan ️ Why structural and engineering reports can become important underwriting documents The retirement of Fannie Mae's Limited Review and Freddie Mac's Streamlined Review Why certain small 2–10 unit condo projects may receive more favorable review treatment ️ How an HOA's master insurance policy can create financing problems ✅ What listing agents should investigate before putting a condo on the market ✅ What buyer's agents should ask the lender before their client spends thousands of dollars on the transaction We also bust some of the biggest myths surrounding the new rules, including: ❌ “Every HOA has to have 15% cash in the bank.” ❌ “My buyer is preapproved, so the condo financing is fine.” ❌ “Someone got a conventional loan here six months ago, so we're good.” ❌ “A special assessment automatically kills the loan.” ❌ “The HOA has a reserve study, so there can't be a problem.” The biggest takeaway? There are now two questions every REALTOR® should be asking in a condo transaction: Does the buyer qualify? And does the condo qualify? An 800 credit score can't fix an underfunded HOA, unresolved critical repairs, or an association that doesn't satisfy applicable conventional lending requirements. If you sell condos, represent condo buyers, serve on an HOA board, or own a condominium in South Carolina, this is an episode you need to hear. Subscribe for more discussions about South Carolina real estate law, contracts, closings, lending, and the issues affecting REALTORS®, buyers, and sellers. #CondoLending #CondoFinancing #FannieMae #FreddieMac #HOA #HOAReserves #CondoRules #RealEstate #Realtor #SouthCarolinaRealEstate #Mortgage #ConventionalLoan #CondoAssociation #RealEstateAgent #DishinDirt Don't forget to like us and share us! Gary * Gary serves on the South Carolina Real Estate Commission as a Commissioner. The opinions expressed herein are his opinions and are not necessarily the opinions of the SC Real Estate Commission. This podcast is not to be considered legal advice. Please consult an attorney in your area.
