"We already checked with the lender"
That's what I heard right before we went under contract on a small condo I have listed here in Estes Park a few weeks ago.
I disclosed upfront, in the MLS and in writing to the buyer’s agent, that the condo subdivision was non-warrantable. Meaning it didn't meet the standard requirements for most conventional loans. I also gave them the names of two local banks that the Buyer could use to be sure the warrantability would not be an issue. The buyer's agent told me they had already run it by the buyer's lender and it wasn't a problem. We moved forward.
Then underwriting happened.
The out of state lender took a second, closer look and got uncomfortable with the building's warrantability. The buyer terminated. A deal that looked solid on day one fell apart weeks later, after we'd all been counting on it closing.
I share that not to point fingers, the agent genuinely believed they'd covered it. I share it because it's about to become a much more common story.
Here's why. As of August 3, 2026, Fannie Mae and Freddie Mac eliminated the "Limited Review" process for most condo loans. That was the fast, lighter-touch path lenders used to approve financing on established buildings without digging into the HOA's full financial picture. It's gone now. Nearly every conventional condo loan requires a "Full Review", a detailed look at the HOA's budget, reserves, insurance, and documentation. Not in itself a bad thing, but it will likely make getting a mortgage for a condo a different process.
A few other things worth knowing if you own, plan to buy, or plan to sell a condo:
Reserve funding requirements just went up. HOAs now need to allocate 15% of their annual budget to their reserves (up from 10%), with full rollout by January 4, 2027. Buildings that don't meet that will risk losing their warrantable status altogether.
Insurance matters more too. Master policy deductibles above $50,000 per unit can now trigger non-warrantable status on their own.
It's not all bad news. Smaller condo subdivisions (2~10 units) now have a path to skip the Full Review entirely, and the old rule that penalized buildings with a lot of investor-owned units has been dropped. Which I personally think is great news for some buildings that were previously locked out of conventional financing.
My takeaway from the recent experience, now magnified by these changes? An informal check with a lender is not the same as a lender's written confirmation. If you're buying or selling a condo right now, ask specifically whether the building is going through Full Review, and get that answer (in writing preferably) before you have agreed on a contract, not after.
Financing surprises used to be the exception in condo deals. With these changes, they're going to happen more often, unless we all get more rigorous, earlier, in exactly the way I wish had happened on the other side of this one.
If you're thinking about a condo purchase or sale in the Estes Valley or Northern Colorado right now, I'm happy to walk through what this means for your specific situation.
