Buying a condo today—whether you’re a first-time homebuyer or a real estate pro—comes with some new twists. Since early 2022, after a condo collapse in Florida sparked safety concerns, Fannie Mae and Freddie Mac have tightened condo mortgage rules. As of February 25, 2025, these updates, plus specific “Project Review Processes,” are reshaping how loans work. Here’s the scoop.
 

The big change? Lenders now demand proof a condo building is solid—financially and physically. That means the homeowners’ association (HOA) needs cash saved (at least 10% of its budget) for repairs and inspection reports showing no safety red flags. If a condo isn’t “warrantable” (meeting strict ownership and financial rules), loans get tougher, especially for older buildings or those with lots of renters. You might face higher rates or bigger down payments. Even FHA loans, great for low down payments, now require condos to be on an approved list.

So, how do lenders check a condo project? It depends on the “Project Review Process”:

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  Limited Review: A quick check for safe, established condos. Needs 90% of units sold, an owner-run HOA, and often a 10%+ down payment. It’s fast, assuming the project’s stable.
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  Full Review: A deep dive for most condos. Requires solid finances (10% budget in reserves), 50% owner-occupied units, and no major safety issues. More thorough than Limited.
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  Full Review for New/Converted Projects: Extra strict for new or recently flipped condos. At least 50% of units must be sold, with proof the building’s sound and repair-free.
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  PERS Approval: Fannie Mae reviews complex or new projects (like in Florida). Developers submit financials and docs for a direct okay, making loans easier if approved.
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  Exemptions: Detached condos or 2-4 unit projects skip big reviews. Lenders just check the unit and buyer, not the whole project.

These rules prioritize safety but add hurdles, especially for riskier condos. Before you commit, ask your lender or ME which review applies and if the project passes. It’s your key to a smoother deal—whether it’s your first rodeo or not!