If you’re thinking about buying a condominium, there’s an important change you should know about.

Mortgage lenders are no longer looking only at you as the buyer. They’re taking a much closer look at the financial health of the entire condominium community before approving many loans.

That means your financing could depend just as much on the condo association as it does on your credit score.

Why the Change?

After the tragic Surfside condominium collapse in Florida in 2021, regulators and mortgage agencies began taking a much closer look at the condition of condominium buildings across the country.

Fannie Mae and Freddie Mac have continued tightening their lending requirements, and many condo purchases now require a full review of the association’s finances instead of a simplified review.

Lenders may now closely examine:

• Reserve funds for future repairs
• Building maintenance history
• Insurance coverage
• Deferred maintenance
• Special assessments
• The overall financial health of the HOA

The goal is simple: reduce the chances that buyers purchase into a community facing major repair bills or financial problems.

What This Means for Buyers

If you’re financing a condo, don’t be surprised if your loan takes longer than expected.

Your lender may request additional documents from the HOA before giving final approval. If the association can’t provide what is needed—or if the finances don’t meet lending guidelines—the loan could be delayed or even denied.

That doesn’t necessarily mean there’s something seriously wrong with the building. It simply means the project may not meet the lending standards required for loans sold to Fannie Mae or Freddie Mac.

Some lenders may still finance the purchase by keeping the loan in-house, but that could require:

• A larger down payment
• Higher interest rates
• Different loan terms

HOA Documents May Become the Biggest Bottleneck

One issue I see in real estate transactions is that HOAs are notoriously slow when it comes to providing demand statements, payoff information, CC&Rs, meeting minutes, budgets, and other required documents. At the same time, many associations continue charging higher and higher fees for those documents and services.

These delays already create frustration for buyers, sellers, lenders, escrow companies, and real estate agents. With lenders now requiring more information about the financial condition of condominium associations, slow response times from HOAs could become an even bigger obstacle to closing on time.

Unfortunately, that’s a challenge many buyers don’t learn about until they’re already under contract.

What This Means for Sellers

If you’re selling a condo, don’t wait until you have an accepted offer to start gathering HOA information.

Being proactive can save valuable time and help prevent unnecessary delays during escrow.

Having the association’s financial documents available early can make your property more attractive to buyers and help keep the transaction moving.

Cash Buyers May Have an Advantage

Because these additional lending reviews only affect financed purchases, cash buyers may be able to close much faster.

In competitive situations, that speed can sometimes make the difference between winning and losing a property.

My Advice

I’ve been helping buyers and sellers navigate the Las Vegas and Henderson real estate market for more than 30 years, and one thing hasn’t changed:

The transaction usually goes much smoother when everyone knows what to expect before problems arise.

If you’re considering buying or selling a condominium, it’s more important than ever to understand the HOA’s financial condition, the building’s maintenance history, and how those factors may affect financing.

Every condo community is different. Some will have no issues at all. Others may require additional review.

Knowing the difference before you write an offer—or list your property—can save you time, money, and unnecessary stress.

If you’re thinking about buying or selling a condo in Southern Nevada and have questions about how these new lending guidelines could affect your situation, I’d be happy to help you understand what to expect before you make your next move.