I have helped a handful of people finance condos in almost a decade of lending. Strangely enough, right as Fannie Mae and Freddie Mac eliminated the fast track condo reviews that used to apply with a large down payment, condos started appearing in my world. I had a client buying a condo, and multiple agents reaching out on separate listings, none of them aware the rules had just changed.

What actually changed for Conventional Financing

As of August 6, any building with more than 10 units requires a Full Review, regardless of how much the buyer is putting down. That review looks closely at the association's finances, reserves, and insurance, and it is not a quick checkbox. A large down payment used to be enough to sidestep most of this scrutiny. It no longer is.

Here is what you need to check:

• The reserve study needs to show funding at the highest level, not a baseline amount, and it needs to be dated within the last three years.

• The master policy must have a per unit deductible that is under $50,000. If the building's policy carries a higher deductible than that, it can create problems for a buyer down the line.

Get ahead of it

If you can get the HOA's most recent budget, reserve study, and insurance declarations page before a buyer is under contract, that can help determine eligibility much sooner, and it can save everyone a scramble later. Some HOAs charge a fee, sometimes $500 or more, just to fill out the condo questionnaire lenders need, so it helps to know that cost is coming too.

Condo or townhome? Don’t trust the listing!

Whether a property is legally a condo or a townhome has nothing to do with what it looks like or what the listing calls it. I have seen properties listed as townhomes that were legally condos, which created financing complications that nobody saw coming. The distinction matters because condos and townhomes follow completely different financing rules.

The only reliable way to confirm what you are actually buying is to look at the ownership structure in the preliminary title report or the deed. If the language references a condominium declaration or conveys a "unit" along with an "undivided interest in the common elements," you own the airspace inside the walls and it is a condo. If the deed conveys a "lot" with specific dimensions, you own the land underneath and it is likely a townhome or PUD. County assessor records can also help, but when in doubt the title report is the definitive source. The MLS property type field is the last thing you should rely on, as agents select it themselves and it gets mislabeled more often than people realize.

If you are early in the process

If a listing sits in a building with more than 10 units, get ahead of this. Confirm whether the property is a condo or a townhome through the title report, and if it is a condo, start gathering the HOA's reserve study, budget, and insurance declarations page as early as possible.

If you are already further along

If you are already under contract and just finding out about any of this, reach out. I have non-warrantable condo financing options available, and depending on the specific situation, there may still be a path to keep you on track and get to closing.

I also have a condo eligibility tool that can help sort through a specific building's situation if the resources above are not giving a clear answer. Just reach out and I will walk through it with you.