When you finance a condo, the lender evaluates both you and the condominium project. For conventional loan applications dated on or after August 3, 2026, Fannie Mae retired its Limited Review option. Many established condo projects now need a Full Review unless a specific project-review waiver applies.
You can have great credit, enough money down, and stable income—and still hit a financing problem because of the condo association.
That is the part many buyers do not realize until they are already under contract. A condo mortgage involves two approvals: the buyer’s loan and the project itself.
What changed for conventional condo loans in 2026?
Fannie Mae retired its Limited Review process for loan applications dated on or after August 3, 2026. Projects that previously qualified for that shorter review must now go through Full Review unless the transaction and project qualify for a Waiver of Project Review.
Fannie Mae also tightened how lenders may rely on a reserve study. When a reserve study is used, the project budget must fund the highest recommended reserve allocation in the study. The baseline method that allowed reserve cash to approach zero is no longer permitted.
Another change is coming: for applicable loan applications dated on or after January 4, 2027, Fannie Mae’s standard minimum budget allocation for replacement reserves is scheduled to rise from 10% to 15% of annual budgeted assessment income. A qualifying reserve study may provide another way to satisfy the reserve requirement.
What does a Full Review look at?
The lender may need documents and information covering:
- The HOA budget and financial statements
- Replacement reserves and any reserve study
- Current or planned special assessments
- Deferred maintenance or critical repairs
- Master property insurance
- Owner assessment delinquencies
- Pending litigation
- Commercial space, ownership concentration, and other project details
The lender enters project information into Fannie Mae’s Condo Project Manager system and is responsible for confirming that the project meets the applicable requirements.
Can a condo be approved by one lender and declined by another?
Yes. The project documents available at the time, the loan program, the type of review, and the lender’s own requirements can all affect the answer. An old approval, a neighbor’s recent closing, or an online list does not guarantee that your specific loan will be approved today.
What should an Austin condo buyer ask before making an offer?
- Has this project recently completed a conventional Full Review?
- Are there current or planned special assessments?
- Does the HOA have unresolved structural repairs or deferred maintenance?
- Is the master insurance policy current and adequate?
- Can the HOA or management company deliver the budget, questionnaire, insurance, reserve information, and meeting minutes quickly?
- Should the financing contingency allow extra time for project review?
This matters across downtown Austin, West Campus, Lakeway, Northwest Hills, and suburban condo communities in Cedar Park, Leander, and Round Rock. The prettier the pool is, the less anyone wants to discuss the reserve study—but the reserve study may matter more to your loan.
Does a small condo project get reviewed the same way?
Not always. Fannie Mae provides a project-review waiver for certain two-to-four-unit condo projects and certain five-to-ten-unit projects that are not part of a larger development or master association. The exact rules depend on the project and transaction, so this should be checked before assuming the waiver applies.
What if the condo project does not qualify?
A conventional loan decline does not always end the purchase. Depending on the buyer and project, possible alternatives may include FHA or VA financing when the project meets those program requirements, portfolio financing, or a non-warrantable condo loan. These options can have different rates, down payments, reserves, and documentation.
Get the condo reviewed early
If you are considering a condo, send me the address before you fall in love with the view. I can help identify the likely review path, request the right documents, and explain the financing options in plain English.
For more detail, read my Austin Condo Financing Guide, check Austin-area FHA and VA condo approval status, or explore the Texas Mortgage Loan Guide.
Primary sources:
- Fannie Mae Lender Letter LL-2026-03 — March 18, 2026
- Fannie Mae Selling Guide: Full Review Process — current guide accessed October 12, 2026
- Fannie Mae Selling Guide: General Information on Project Standards — current guide accessed October 12, 2026
Stephanie Donnell | Edge Home Finance, LLC | Company NMLS 891464 | Austin Branch NMLS 2514483. Provided for informational purposes only. This is not a commitment to lend, and not all borrowers or properties will qualify. Information and programs are subject to change. Subject to credit and property approval. NMLS Consumer Access.