We asked one of our preferred lenders, Mike Stone of Threepoint Mortgage to help us understand the changes in mortgage underwriting for condominiums. Here is what he has to say:
Upcoming changes to conventional condo lending guidelines could have a meaningful impact on condominium associations, owners, buyers, and sellers throughout Summit County.
The most significant change involves HOA reserve funding. Beginning January 4, 2027, condo associations undergoing a Full Review will generally need to allocate at least 15% of their annual assessment income toward replacement reserves, up from the current 10% requirement. Associations contributing less may still qualify if they have an acceptable reserve study and their budget includes the study’s highest recommended reserve contribution.
For some associations, meeting the new standard may require an increase in HOA dues. While higher dues are never welcome news, adequately funded reserves help associations prepare for major repairs, reduce the likelihood of unexpected special assessments, and protect the long-term condition and marketability of the community. Fannie Mae estimates that increasing reserve contributions from 10% to 15% could raise average dues by approximately $13 to $14 per unit each month.
There is also some welcome flexibility on the insurance side. Condo master policies will now be permitted to provide actual cash value coverage for roofs instead of requiring roofs to be insured on a replacement-cost basis. Roof coverage is still required, and the master policy must otherwise satisfy applicable coverage requirements, but this change may help associations obtain compliant and more affordable insurance, particularly in mountain communities where premiums and coverage limitations have become growing concerns.
These changes reinforce an important point: condo financing depends on more than the buyer’s qualifications. The HOA’s budget, reserves, insurance, property condition, special assessments, and governing documents can all affect whether conventional financing is available.
If you are considering buying, selling, or refinancing a Summit County condo, start the condo review early. Identifying potential HOA or insurance concerns before going under contract can help prevent surprises and keep the transaction moving smoothly.
For more information contact Mike:
Mike Stone
Three Point Mortgage
Mortgage Loan Officer
Branch Manager
NMLS 1120929
📱 303-999-1664