Beginning August 3, 2026, Fannie Mae will eliminate Limited Project Review for condominium loans.
For most condo purchases, that means the lender will need to review more of the HOA’s finances and project eligibility before approving the loan.
This does not mean condo financing is going away. It does mean buyers, Realtors, and HOA boards should review the project earlier in the process.
Why This Matters
With a condominium, approving the buyer is only part of the process.
A buyer may have strong credit, solid income, and a large down payment, but the loan can still run into trouble if the condominium project does not meet Fannie Mae’s requirements.
Once Limited Review goes away, the HOA’s finances and documentation will play a larger role in whether the loan can move forward.
What Limited Review Allowed
Limited Review gave certain primary residence, second-home, and investment-property transactions a more streamlined path to conventional financing.
It did not waive every condo requirement. Issues such as critical repairs, unsafe conditions, and certain pending litigation could still make a project ineligible.
However, Limited Review allowed lenders to bypass some of the broader HOA qualification questions required under Full Review, including issues involving:
- reserve funding
- HOA delinquencies
- investor concentration
- certain budget and financial requirements
This often helped a strong borrower move forward even when the HOA might not have passed a Full Review.
What Changes Under Full Review
Once Limited Review is retired, most projects that do not qualify for a waiver will need to satisfy Full Review requirements.
That generally means the lender will take a closer look at:
- the HOA budget
- reserve contributions
- assessment delinquencies
- insurance coverage
- project ownership and financial characteristics
- other agency eligibility requirements
The practical result is more documentation, more HOA involvement, and a greater chance that a project-level issue could affect the loan.
Smaller Projects May Qualify for a Waiver
Some projects with 10 units or fewer may qualify for a Waiver of Project Review.
That waiver is not automatic, and the project must still meet applicable eligibility and insurance requirements. Still, it may provide a simpler path for certain smaller communities.
Reserve Requirements Are Also Changing
Beginning in 2027, Fannie Mae’s standard reserve contribution requirement for Full Reviews is scheduled to increase from 10% to 15% of annual assessment income, unless the project qualifies through an acceptable reserve-study alternative.
An HOA may have money in reserves and still fail the mortgage review if its current budget is not contributing enough.
That distinction will become increasingly important for HOA boards and listing agents.
Review the Project Early
The best time to uncover a condo financing issue is before the buyer is deep into escrow.
Buyers and agents should not assume that a previous conventional sale means the project is still eligible. Budgets, insurance, reserves, litigation, and repair conditions can change.
Helpful documents may include:
- the current HOA budget
- the most recent reserve study
- master insurance information
- a completed condo questionnaire
- details about special assessments, litigation, and major repairs
Some lenders may also have prior review information for the same project, which can help identify existing approvals or known concerns.
Other Financing Options May Be Available
A project that does not qualify for Fannie Mae or Freddie Mac financing may still have other options.
Depending on the borrower and the project, those may include portfolio loans, non-warrantable condo programs, bank-statement loans, or other non-agency financing.
These programs may require a larger down payment or carry a higher rate, and not every project will qualify.
The goal is to identify the issue early enough to evaluate the available paths before the buyer makes major commitments.
The Bottom Line
Condo financing is no longer only about whether the buyer qualifies. The project itself will require more attention.
Buyers, Realtors, and HOA boards will be in the strongest position when the project is reviewed early, the documentation is organized, and financing alternatives are considered before the transaction is at risk.
Buying or listing a condominium? Qualified Home Loans can help review available project information, compare lender options, and identify possible alternatives when standard conventional financing may not fit.