A buyer writes an offer on a Las Vegas condo. They pay for the inspection and the appraisal, and the deal looks solid. Then, in the third week of escrow, the lender reviews the HOA and finds it doesn't fit the guidelines, and the purchase falls apart. The Las Vegas Review-Journal described that exact scenario in May 2026, after Fannie Mae rewrote its condo project rules.
The same report warned the seller's side too. If an HOA doesn't meet the new guidelines, the seller may be limited to cash buyers, which shrinks the buyer pool and pulls down the sale price.
So before your unit's finishes or view come into it, a lender looks at the association's budget, reserves, repair list and ownership mix. Those decide whether a financed buyer can bid at all.
The 2026 Rule Changes, by Date
- March 18, 2026. Fannie Mae issued Lender Letter LL-2026-03, coordinated with Freddie Mac and the FHFA. It overhauled condo project standards and property insurance requirements.
- Immediately on issue. Fannie dropped its 50% investment-property concentration limit for established projects reviewed under Full Review on investor loans.
- May 26, 2026. HUD automated FHA case-number assignment for some condo projects listed as "Expired" or "Rejected - Register SUA." HUD said plainly that a case number is not project or unit approval, and that the update did not expand the condo program.
- August 3, 2026. Limited Review was retired. For loan applications dated on or after that day, established projects that used to qualify for Limited Review must go through Full Review or, where eligible, a Waiver of Project Review. Lenders relying on a reserve study must also confirm the HOA budgets the study's highest recommended reserve amount. The "baseline funding" method, which lets the reserve balance fall toward zero, is no longer accepted.
- January 4, 2027. Under Full Review, the minimum replacement-reserve allocation rises from 10% to 15% of the HOA's annual budgeted assessment income.
That last date is about two months after this post goes up. An HOA that clears the 10% minimum today could fall short in January if its budget stays the same.
What Full Review Checks, and Which Document Shows It
Matt Hennessy, a Las Vegas-area mortgage advisor, told the Review-Journal that the biggest change is that "lenders now have to do a deeper review of condo projects, especially their reserves, insurance and repair risks."
Fannie Mae's Selling Guide list of ineligible projects sets out the triggers. Each one maps to a document an owner can request now.
| Fannie Mae trigger | Threshold | Where it shows up |
|---|---|---|
| Commercial space | More than 35% of the project | Project declaration and HOA records |
| Litigation | Certain safety, structural or habitability suits | Condo questionnaire and board minutes |
| Single-entity ownership | More than 2 units in 11–20 unit projects; more than 20% in projects of 21+ units | Ownership roster in the questionnaire |
| Critical repairs | Safety, structural, habitability or financial-viability risk, including unfunded repairs over $10,000 per unit due within 12 months | Reserve study and inspection reports |
| Reserve allocation | 10% of budgeted assessment income now; 15% for Full Review applications dated on or after Jan. 4, 2027 | Operating budget |
The ownership rows are where the 2026 changes pull in opposite directions. With the investor concentration limit gone, an established complex owned mostly by many separate landlords no longer fails on that count. One owner holding a large block of units still does, because the single-entity cap stayed. Fannie counts rented and leased units toward that cap.
Small projects have a separate route. Fannie expanded the Waiver of Project Review to new and established projects with ten or fewer units. A five- to ten-unit project qualifies only if it isn't part of a master association or a larger development.
The Reserve Bump in Dollars
Take a hypothetical 100-unit association that bills $250 a month per unit. That's $300,000 a year in assessment income. At the current 10% minimum, a Full Review expects at least $30,000 a year going to replacement reserves. From January 4, 2027, the floor is $45,000. The board has to find the extra $15,000 by raising dues, cutting other spending, or a mix of both. If it does neither, the complex can fail the reserve requirement for any buyer whose loan application is dated after the deadline.
Nevada already requires the planning that would show the gap. Under NRS 116.31152, an HOA's executive board must arrange a reserve study at least once every five years, review the results at least once a year, and adjust the funding plan as the board sees fit. The study generally has to be done by someone holding a permit under NRS Chapter 116A. It has to estimate each major component's remaining useful life and its repair or replacement cost, along with the funding plan needed to cover them. A summary goes to the Nevada Real Estate Division within 45 days of the board adopting the study.
Those studies can move the numbers a lot. In a March 2026 Review-Journal HOA column, a reader reported that an updated reserve study raised their association's funded percentage from below 60% to 69% for its 2026 budget.
Why FHA Doesn't Fill the Gap
When a complex fails conventional review, Hennessy said buyers "may need to entertain alternative financing options like FHA, VA or non warrantable loan programs." FHA comes with its own conditions.
HUD's condominium page says FHA financing works in an FHA-approved project, or through Single-Unit Approval when the project isn't approved. Either way, HUD reviews the project's insurance, finances, litigation and physical condition. Under HUD's 2019 final rule, project approval generally lasts three years. Recertification can be filed from six months before expiration until six months after. Once that window closes, the HOA has to start a new application.
Single-Unit Approval is capped. It applies only to completed projects with at least five units and no HUD adverse determination. FHA-insured loans are limited to 10% of units in projects of 10 or more, and to two loans in projects under 10. A complex that already has its share of FHA borrowers can't take another one this way. HUD's condo lookup shows a project's status as Approved or Expired, and the VA condo report does the same job for VA buyers.
What a Failed Review Looks Like
8 News Now reported in March 2025 on Bonanza Park, a 132-unit complex on the Las Vegas west side. One owner and his companies had bought more than 100 of the units, with plans to buy the whole complex and convert it to rentals. The same report said owners paid assessments after a 2021 fire at one of the buildings and a problem with insurance coverage.
Compare that with the table above. One entity holding more than three-quarters of a 132-unit project is well past Fannie's 20% single-entity limit, so dropping the investor cap wouldn't change the result. That report dates from 2025, and the complex's current status may be different. It still shows how ownership concentration alone can shut out conventional buyers, regardless of the condition of any one unit.
Where This Shows Up in the September 2026 Numbers
The latest Las Vegas Realtors release, published Oct. 6, puts the September 2026 median condo/townhome price at $290,000. The single-family median was $470,000. At the end of September, 2,796 condos and townhomes were listed without offers, and overall sales ran at five months of supply. In September, 70.5% of condos and townhomes sold within 60 days, compared with 75.9% of existing homes. Cash buyers made up 23.5% of all local sales.
Condos are the lower-priced entry point, and as Hennessy put it, they're often "a lower barrier of entry to homeownership" for first-time buyers. Those buyers usually depend on financing. The slower condo sales pace in the September figures is consistent with project review adding work to condo deals that houses don't face. Each complex that fails review is left with the roughly one in four buyers paying cash.
The Documents to Pull Before Listing
Nevada already puts most of the paper in front of buyers. Under NRS 116.4109, a resale package includes the current operating budget, a year-to-date financial statement and a summary of the reserves. The full reserve study is available for inspection on request by the owner, the agent or the buyer. It isn't automatically included in the package.
Sellers can go through those documents before they list:
- Request the operating budget and check the reserve line against 10% now and 15% after Jan. 4, 2027.
- Ask to inspect the full reserve study for repairs due within 12 months.
- Order the condominium certification, the form a lender sends the HOA or its manager, before listing. One local broker in the Review-Journal said sellers who confirm their unit is financeable will attract more buyers.
- Check the project's status in HUD's lookup and the VA report.
Hennessy told the paper to expect more upfront costs for HOA budgets, reserve studies, insurance declarations and legal documents before a lender approves a loan. Paying those costs before listing costs the same as paying them during escrow, and it means you find out about any problem before a buyer does.
FAQ
Does the Jan. 4, 2027 change affect a deal already in escrow? The 15% minimum applies to Full Review loan applications dated on or after Jan. 4, 2027, so the application date matters, not the closing date.
Is condo financing going away? Hennessy's answer in the Review-Journal: "condo financing is not disappearing, but the approval process is likely to be more detailed and less flexible."
Did HUD loosen FHA condo rules this year? HUD said its May 2026 Single-Unit Approval update was procedural and did not expand the program.
This post is general information, not legal, tax or financial advice. Confirm how these rules apply to your unit and your loan with a qualified lender or attorney.
If you're selling a condo, check whether lenders will finance it before you set the price. The Richardson Group can help you pull your HOA's budget, reserve summary and condo certification before listing, so you know your complex's status before a buyer's lender looks at it. Get your free selling strategy call.
