Condo Financing: Your Approval and the Building’s Review Are Separate

Why this matters: A strong preapproval covers you, not the building. If the condo project does not meet the lender's requirements, the loan can stall even when your own file is solid.

Cover: Cosmopolitan on the Park in Portland, Oregon, photographed February 6, 2026. Photo: PortlandAppraisalBlog / Wikimedia Commons, CC BY-SA 4.0. Cropped to a 3:2 frame and resized by mortgage.news; the cropped image is shared under the same license. Shown as an example of condominium construction; no financing status of this building is implied, and the photographer does not endorse this article.

A mortgage preapproval can help you shop for a condo, but it does not clear the building for financing. The Consumer Financial Protection Bureau describes preapproval as a lender’s tentative willingness to lend based on assumptions, not a guaranteed loan offer. Before making an offer, ask what remains to be checked about both your finances and the condominium association.

Why the project gets its own review

For loans intended for Fannie Mae, project review is separate from underwriting the borrower, the transaction and the individual unit’s appraisal. The association’s finances, insurance, building condition and legal issues can affect eligibility even when a buyer has strong credit.

The review required depends on the project and loan. Freddie Mac’s current overview describes several review routes and qualifying exemptions. Ask your lender which route applies to your purchase before assuming every condo needs the same paperwork.

Request the association’s documents early

Ask the seller, listing agent or association manager what is available, how much the packet costs and how long delivery takes. Give your lender the project’s legal name, address and management contact.

Supplemental perspective: Mortgage Mom Radio's Debbie Marcoux, a lender, explains early condo project review, published September 25, 2026 (6:07). The video is seller-oriented and promotes the lender's own review, which is lender-specific and does not qualify a borrower.

Start with these records:

• Budget and reserves: The current association budget, recent financial statements, reserve balance and latest reserve study. These help show how ongoing expenses and future replacements are funded. Fannie Mae identifies these among its project review documents.
• Insurance: The master policy documentation and agent contact. Ask your lender and insurance professional to review coverage, deductibles and what your own unit policy must cover. The CFPB explains that association coverage for common areas does not eliminate the need for your own insurance.
• Repairs and assessments: Recent board minutes, inspection or engineering reports, repair schedules, and details of approved or planned special assessments, including purpose, remaining balance and payment schedule. The standard condo questionnaire asks about inspections, unresolved deficiencies, reserves and assessments.
• Rules and legal matters: The declaration, bylaws, use or rental restrictions and information about pending litigation. Ask who will complete the lender’s questionnaire; the required records vary with the review.

Understand what a special assessment means

An assessment is a reason to investigate its purpose. Under Fannie Mae’s rules, an assessment tied to an unresolved critical repair makes the project ineligible. Routine maintenance is treated differently. Paying your unit’s assessment does not establish that the underlying building work is complete.

Ask what repairs remain, how they will be funded and what documentation confirms completion. A freshly renovated unit cannot answer those building-wide questions.

Confirm the current status and full cost

A neighbor’s previous closing is useful background, but ask your lender to confirm the project’s current eligibility and any outstanding conditions. Fannie Mae says project status can change when new information affects eligibility.

Build your budget around the mortgage, taxes, unit insurance, association dues and assessments. The CFPB notes that HOA dues are usually paid separately from the mortgage payment. Before committing to an offer timeline, ask your agent and lender how much time the document review needs.