Condo Financing Just Got More Complicated.
Here Is What Portland Buyers and Sellers Need to Know
If you are buying or selling a condo in Portland right now, there is a new set of rules worth understanding before you list or make an offer. Fannie Mae and Freddie Mac just overhauled how condominium projects get approved for conventional financing, and the changes are already affecting timelines. This applies specifically to conventional loans. FHA, VA, and non-warrantable loan programs each follow their own separate approval process and are not governed by these particular rules.
Why This Is Happening
These changes trace back to the Champlain Towers South collapse in Surfside, Florida in June 2021. Investigators found the building had known structural issues and deferred maintenance that went unaddressed for years, and a big part of why was that the HOA's reserves were never funded at a level that could cover the real cost of upkeep. Fannie Mae and Freddie Mac responded by tightening how they evaluate condo projects nationwide, looking harder at reserve funding, financial health, insurance coverage, and litigation history, so a building's finances actually match what it costs to keep the property safe and maintained.
What Changed
Starting August 3, 2026, Fannie Mae and Freddie Mac eliminated the Limited Review and Streamlined Review processes that used to let many condo loans move through underwriting quickly. Unless a project qualifies under a narrow exception for buildings with ten or fewer units, every condo loan now requires a Full Review. That review digs into the HOA's reserve funding, litigation history, delinquency rates, and master insurance policy, regardless of how much the buyer is putting down.
A second change lands January 4, 2027. HOAs will need to fund reserves at 15 percent of their budget for capital expenditures and deferred maintenance, up from the previous 10 percent. Many HOAs do not yet know this is coming, and plenty will not be in compliance when the deadline hits.
Investor ownership limits were also loosened for established projects, though new construction still faces a cap.
The 50 percent jump in required reserves lands on a short timeline, and it is not just a paperwork headache. Higher reserves mean higher HOA dues, which can hit retirees, owners on fixed incomes, and associations already dealing with rising insurance and tax costs the hardest. It is worth having that conversation with your HOA now rather than finding out at closing.
What This Means If You Are Buying
Full Review takes longer than the process most buyers and agents are used to. If the HOA has its documents organized and current, a lender can sometimes turn around approval in about 24 hours. If the HOA does not, or if the paperwork is outdated (expired insurance binders are a common culprit), the process can stretch well beyond a typical 30-day close.
We saw this play out firsthand with a buyer purchasing a condo in the Pearl District. Getting documents out of the HOA and getting anyone to answer questions felt like pulling teeth, and our timeline was already tight since the transaction spanned the holiday season. Partway through, we hit a real snag: the master insurance policy did not meet the coverage requirements, and fixing that meant the HOA board had to vote on changes to the policy. A board vote means more people and more time, not something that resolves in a day or two. It added real stress for everyone involved. None of it was anyone's fault exactly, but it underscored something important: knowing these possibilities exist going in, and being prepared for them, makes a real difference in how smoothly a transaction goes, even when a snag does show up.
Before writing an offer on a condo, it is worth asking whether the project has already been reviewed and approved by a lender, and whether that approval is recent. Approval through FHA does not automatically carry over to conventional financing, since FHA and Fannie Mae or Freddie Mac evaluate projects separately.
What This Means If You Are Selling
This is where the real opportunity is. Most listing agents have not done anything to prepare a condo's HOA documents before it hits the market, which means buyers' lenders are starting the review process from zero the moment an offer comes in. If you gather the documents ahead of time, you remove one of the biggest sources of delay in a condo transaction.
The documents worth having ready before you list:
A completed condo questionnaire from the HOA management company
The current HOA budget
The most recent reserve study
Any special assessments, past or pending
Insurance coverage details for the master policy
Disclosure of any known structural issues or litigation
Many HOAs use a service like CondoCert to distribute these documents. Current owners can often get them for free, while lenders, agents, and title companies typically pay a fee. There is also a tool called Fannie Mae's Condominium Project Manager, a database that tracks which projects have already been reviewed and approved. Once one lender submits documentation and a project gets approved, other approved lenders can see that status and skip a redundant review, which means the work you put in now can save time on future sales too. Agents do not currently have direct access to this database unless they are an HOA's official representative, so this is still best coordinated through your lender.
We have already started building this into how we prepare condo listings. Before we bring a condo to market, we begin gathering the HOA document package early, the same way we would prepare any other disclosure, so buyers and their lenders are not starting from scratch.
What This Means If You Already Own
Even if you are not planning to sell anytime soon, these changes are worth paying attention to. Your HOA's reserve funding is about to become a bigger part of your monthly dues, and it is worth asking your board now how they plan to handle the increase to 15 percent by January 4, 2027. A well-run HOA will already be thinking about this. If yours has not brought it up, it might be worth raising the question yourself, or at least understanding what the timeline and financial plan looks like before it becomes a surprise.
It is also worth knowing where your building stands with lenders. If your HOA has never gone through a Full Review, or if it has been a while since its last approval, that could affect resale value down the road, since buyers using conventional financing will run into the same review process you would if you were selling today. Staying current on your HOA's documentation, reserve study, and insurance coverage protects your own equity, not just a future buyer's timeline.
If a Condo Does Not Qualify
Not every condo will meet the new conventional lending standards, and that does not mean it cannot sell. Non-warrantable condo loan programs exist for exactly this situation, along with FHA and VA options that follow different rules than conventional financing. Scott McCarty with CrossCountry Mortgage, one of our go-to lenders for these situations, reviews non-warrantable condo cases individually rather than turning buyers away outright. If a condo you are interested in does not fit the new Fannie Mae or Freddie Mac guidelines, it is worth talking to a lender who works with non-warrantable condos before assuming the deal is dead.
Disclaimer:
This information is provided for general educational purposes and should not be construed as legal, financial, or tax advice. Property tax laws and regulations can vary and change over time. Homeowners are encouraged to consult with a qualified tax professional, attorney, or local assessor’s office for guidance specific to their situation.
Ready to Buy a Home in Portland?
The Portland market rewards preparation and local knowledge. We work with buyers who want to understand their options before they decide. If you are getting started, the [Portland Buyer Guide] is a good place to begin.
Thinking About Buying or Selling a Condo in Portland?
Condo transactions have more moving parts than they used to, and getting ahead of the paperwork matters more than ever. Whether you are weighing an offer on a condo or getting one ready to list, we can help you understand what a lender will be looking for before it becomes a problem. Give us a call or text at 503-951-8547.
Kim Campbell, Realtor | PSA, RENE | Licensed Oregon Broker
Francisco Salgado, Realtor | MCNE, EA | Licensed Oregon and Washington Broker
Campbell Salgado Real Estate Group with Soldera Properties
