If you’re thinking about selling your condominium, there are important changes that could impact how easily buyers obtain financing. While most of the changes will be reviewed by your buyer’s lender, there are a few things you should consider before listing your property to facilitate a smooth closing.
Fannie Mae has become concerned with aging condominium projects, deferred maintenance, rising insurance costs and underfunded HOA reserves.
A limited review of the project is being eliminated. A limited review allowed fewer questions and less documentation from the HOA to determine project eligibility. A full review process is now required which means the buyer’s lender will be asking more questions about the financial and structural integrity of the project.
Reserve funding has increased from 10% to 15% of the annual budgeted income assessment beginning Jan 2027. This means the HOA budget will be reviewed more closely by the lender and inadequate funding will need to be addressed.
If a reserve study has been completed within the last 3 years, the lender will want to review it. Fannie Mae is placing greater emphasis on the overall financial health of the HOA. They want to know that the association is preparing for future expenses such as roofing, siding, parking structures, boilers, and other major components.
The HOA master insurance policy is being reviewed more closely by lenders. Lenders are looking for coverage limits, deductible amounts, and the buyer’s HO6 policy.
Before listing your condo, you should consider gathering the below:
Current HOA budget
Reserve study
Information on special assessments
Master insurance policy
HOA meeting minutes discussing major repairs and insurance changes
Working with a local Summit County lender is your best option when purchasing a condo in our resort market. Please reach out to me with any questions.
Note from Nelson Mountain Real Estate:
Jennifer Cleary with BOK Financial is one of our trusted Lenders for Summit County real estate.
You can reach Jennifer at 970-668-2200 or at [email protected]
