On August 3, Fannie Mae and Freddie Mac retired a shortcut that has quietly made condo sales easier for years. It is worth understanding whether or not you are thinking about selling. And if you are under contract right now with financing, your application date determines which rules apply, so it is worth a call to your lender today.
By Liz Reyna, Downtown Austin Luxury High-Rise Specialist. Published September 2026.
Limited Review retired. Every conventional loan in a building over 10 units now requires Full Review.
Reserve funding minimum rises from 10 percent to 15 percent of annual assessment income.
The 50 percent investor concentration cap has been removed for established buildings, subject to single entity and condotel limits.
Until now, a buyer putting at least 10 percent down on a primary residence could use what was called a Limited Review. The lender checked the buyer and did a light pass on the building.
That option is gone. Every conventional loan in a building with more than 10 units now goes through Full Review, meaning the lender examines:
Most of them. Fannie Mae and Freddie Mac do not lend directly. They buy loans from lenders, and their rules govern which loans a lender can sell, which by most estimates covers roughly 70 percent of the mortgage market.
The ceiling on what they can buy is called the conforming loan limit: $832,750 for 2026, in every Texas county. Loans under that figure follow these rules. Loans above it are jumbo, where banks set their own standards. Note that the limit applies to the loan, not the price, so a higher priced unit with a large down payment can still fall under it. Cash buyers are outside these rules entirely.
The review is shifting from the buyer to the building. A buyer can have excellent credit and a large down payment, and the loan can still fail if the building's finances do not meet the standard.
Worth scoping this. At the top of the downtown market, many purchases close cash, and cash buyers are outside these rules entirely. This matters most to financed buyers, and to owners in buildings where financed buyers make up a meaningful share of the potential resale pool.
Condo transactions may take longer depending on how quickly the management company can produce current financials and insurance documents.
Liz's take
The building is now the borrower, in everything but name.
Two practical consequences follow from that. Loans will take longer to close, so build the timeline into your contract rather than discovering it at week three. And your management company becomes part of the transaction, because a lender's questions now go to them and the answers have to arrive quickly and in current form. Responsive management is suddenly a feature of a building, not an amenity.
Starting January 4, 2027, associations will need to allocate 15 percent of annual assessment income to replacement reserves, up from the current 10 percent. Buildings below that mark will need to raise contributions.
In established condominium projects, meaning not new construction, the 50 percent investor concentration cap has been removed. Previously an investment purchase was rejected outright if more than half the units in a building were non owner occupied. For downtown buildings with meaningful rental activity, that opens financing that was unavailable before.
Two conditions still apply, and both are worth checking early:
That second condition is the one to watch downtown. Buildings structured around hotel style ownership and short term rental programs can fall into the condotel category, which puts them outside conventional financing regardless of the investor cap change. If you are looking at a building built around that model, confirm its status with a lender before you write, not after.
A building that fails Full Review is described as non warrantable, and buyers often hear that word and assume the residence cannot be bought. That is not the case. It means conventional financing is off the table, not that financing is.
Portfolio lenders keep loans on their own books rather than selling them, so they set their own standards and can lend where Fannie and Freddie will not. Non conforming and specialty condo lenders operate the same way. These loans are real and they close. They usually carry a higher interest rate and often a larger down payment, which is the tradeoff for a lender taking on a loan it cannot sell.
I have sold in a building that was non warrantable, and I have closed a sale through a change in a building's financing status mid transaction. So I have seen how this plays out in practice rather than how it is described.
There is a common assumption that a building is either approved for financing or it is not, and that the status holds. That was never quite true, and it is now less true than ever. Every loan is judged against whatever the association's documents show at that moment. A building that cleared in the spring is not automatically clear in the fall.
If you are selling, I can tell you what a lender will be looking at before you list. If you are buying, I can have a building's current status checked before you write an offer. Neither is complicated. It just has to happen early.
Your application date determines it, not your closing date. Call your lender today and confirm which set of rules your file falls under. This is the single most time sensitive item on this page.
It means the building does not meet Fannie Mae and Freddie Mac project standards, so a lender cannot sell a loan made in it to them. Conventional financing is unavailable. Portfolio, non conforming and specialty condo lenders still lend in these buildings, typically at higher rates and with larger down payments. Cash purchases are unaffected.
Yes, indirectly. If financing becomes harder in your building, the pool of buyers who can purchase there narrows, and that shows up in values. It also matters for refinancing and for any home equity borrowing tied to the unit. This is worth raising with your board well before you plan to sell.
Keeping the reserve study current, understanding where the association sits against the reserve funding thresholds, and making sure management can produce budgets, insurance certificates and financials quickly when a lender asks. I am not an attorney or a lender, and boards should work with association counsel and their reserve analyst on the specifics, but knowing where the building stands before a buyer's lender asks is the whole game.
Liz Reyna
Downtown Austin Luxury High-Rise Specialist
@properties Lone Star, Christie's International Real Estate
512.431.8283
Whether or not you are transacting. If you want to know where your building stands, or what a lender will see before you list, call or text me anytime at 512.431.8283, or email lizr@christiesrealestatels.com. More on downtown Austin luxury high-rises.