If you have been following the recent headlines about new condominium lending rules, you may have heard that older condos will be impossible to finance or that buyers should avoid condominium communities altogether.

That is not the full story.

The updated Fannie Mae and Freddie Mac requirements are not intended to prevent qualified buyers from purchasing condos. They are designed to help protect buyers from purchasing into communities with serious deferred maintenance, inadequate insurance, or insufficient funds available for future repairs.

As a REALTOR®, I believe buyers deserve more than a dramatic headline. They deserve to understand what the rules actually mean, why the condominium association’s financial health matters, and how the right real estate and lending team can help them evaluate a property with confidence.

Myth #1: Older Condos Are No Longer Eligible

There is no nationwide rule automatically disqualifying a condominium project simply because it is older.

An established condo community may still qualify for conventional financing. The review focuses on matters such as the condition of the property, the association’s financial health, adequate insurance coverage, pending repairs, special assessments, and the amount of money being set aside for future expenses.

An older Arizona condo community with a responsible association, adequate reserves, and a history of completing necessary maintenance may be a stronger purchase than a newer project that has ignored repairs or failed to plan for future expenses.

Age alone does not tell the entire story. The condition and management of the community matter much more.

Myth #2: Every New Requirement Began Immediately

Several changes have been grouped together in news reports and social media posts, which has caused confusion about when the requirements apply.

For applicable loan applications beginning August 3, 2026, Fannie Mae retired its Limited Review process and Freddie Mac retired its similar Streamlined Review process.

However, the increase in the minimum replacement-reserve budget allocation from 10% to 15% does not become mandatory until January 4, 2027.

This distinction is important. It is inaccurate to suggest that every condominium association was suddenly required to increase its reserves to 15% on August 3, 2026.

Myth #3: Condo Project Reviews Are Entirely New

Condo associations were already being reviewed before these updates.

When a buyer finances a condo, the lender generally reviews information about both the buyer and the condominium project. Depending on the loan and project, that information may include:

• The condominium association questionnaire
• The association’s operating budget
• Master insurance coverage
• Current or planned special assessments
• Deferred maintenance or major repair concerns
• Reserve funding and reserve-study information

The retirement of Limited Review does not mean every condo transaction now requires an entirely unfamiliar list of documents.

It does mean that the lender may need to complete a more comprehensive review of the project unless the transaction qualifies for an available waiver or exemption.

Why Replacement Reserves Matter to Condo Buyers

Replacement reserves are funds the association sets aside for major future repairs and capital expenses.

Depending on the community, reserve funds may eventually be needed for:

• Roof replacement
• Exterior painting or stucco repairs
• Parking lot and private road repairs
• Plumbing and electrical systems
• Elevator repairs or replacement
• Pool and common-area improvements
• Structural repairs
• Other major maintenance projects

These expenses do not disappear when the association has not saved enough money.

Instead, the owners may be required to pay a special assessment, accept a substantial increase in monthly HOA dues, or live with repairs that continue to be postponed.

Any of those outcomes can affect a buyer’s finances, enjoyment of the property, and ability to sell or refinance the condo in the future.

Is the Increase From 10% to 15% Really That Dramatic?

A change from 10% to 15% may sound enormous when it is presented without context. A simple example helps explain the actual numbers.

This example does not mean every association will increase its dues by exactly $10 per month. Each association has its own budget, expenses, reserve balance, and financial plan.

It does illustrate why the change should be kept in perspective. Saving a little more toward predictable repairs today may help prevent owners from receiving a much larger bill later.

Special Assessments Can Be a Serious Financial Surprise

Imagine buying a condo, paying your down payment and closing costs, moving into the property, and then learning that every owner must pay thousands of dollars for a roof, plumbing system, structural repair, or insurance shortfall.

That type of special assessment can create real financial hardship, particularly when the buyer has already used a significant portion of their savings to complete the purchase.

Adequate reserves cannot guarantee that an unexpected expense will never occur. However, responsible reserve planning can reduce the likelihood that normal, predictable maintenance becomes a financial emergency for the owners.

One Requirement Actually Became More Flexible

Not every portion of the updated guidance became more restrictive.

Fannie Mae retired its previous investor-concentration limit for established projects reviewed under the applicable process. Freddie Mac also retired its owner-occupancy requirement for established condo projects.

This means an established project is not automatically prevented from qualifying solely because it contains a larger percentage of investor-owned or rented units.

Separate presale requirements continue to apply to new condominium projects, but this change may offer greater flexibility for buyers considering established communities.

Will the Updated Rules Delay a Condo Purchase?

Not automatically.

A smooth transaction depends heavily on how quickly the association or management company provides the requested information and whether the project documentation raises additional questions.

Possible delays are more likely when:

• The association is slow to provide documents
• The condo questionnaire is incomplete
• Insurance coverage needs further clarification
• Major repairs remain unresolved
• A special assessment requires additional review
• The budget or reserve information is incomplete

These are not meaningless paperwork issues. They are matters a buyer should understand before taking ownership and becoming financially connected to the association.

Questions Arizona Condo Buyers Should Ask

When helping a client consider a condo in Ahwatukee, Chandler, Gilbert, Phoenix, or elsewhere in the East Valley, I encourage the buyer to look beyond the interior of the unit.

Important questions may include:

• Has the lender started reviewing the condominium project?
• Are there any current or planned special assessments?
• Are major repairs or deferred-maintenance projects being discussed?
• Does the association have a recent reserve study?
• Is the association following the reserve study’s recommendations?
• Does the project appear to have adequate master insurance?
• Have HOA dues increased significantly in recent years?
• Are there pending lawsuits or unresolved structural concerns?
• Are there restrictions that could affect how the buyer plans to use the property?

The lender determines whether the project meets applicable financing requirements. The buyer should also carefully review the association documents and consult the appropriate legal, insurance, tax, or financial professionals when questions arise.

How a Real Estate Agent Helps During a Condo Purchase

A condominium purchase involves more than finding a unit with the right floor plan and location.

As the buyer’s real estate advocate, I help clients understand which documents are available, identify questions that should be raised, communicate with the lender and other members of the buying team, and keep the transaction moving forward.

I do not believe buyers should be frightened away from condos because of exaggerated headlines. I do believe buyers should understand what they are purchasing and work with professionals who will investigate concerns instead of ignoring them.

The Truth Behind the New Condo Rules

The updated condo requirements are not a nationwide ban on older communities.

They do not mean every condo purchase will be delayed, and they do not mean every HOA must suddenly impose a dramatic increase in monthly dues.

The intent is to promote financially stable communities, responsible maintenance planning, adequate insurance, and greater protection for the people who own the units.

That is ultimately good for buyers.

When a condominium association is maintaining the property and planning responsibly for future expenses, buyers can make their purchase with greater confidence and a clearer understanding of the costs that may come with ownership.

Do not let a headline make the decision for you. Each condo community should be evaluated individually, and the facts—not the myths—should guide your purchase.