What to Check Before Buying a Condo in 2026

When condo prices soften while single-family homes keep climbing, inventory piles up and sellers start cutting, and condos start to look like the best deal in real estate. If you've been priced out of a single-family home for the last few years, you might be right to take a serious look. But a lot of those condos are cheap for a reason, and the reason usually isn't the unit, it's the building. You're buying a share of somebody else's balance sheet, insurance policy, and 20-year-old roof, based on documents most buyers never read. Here are 6 things to check before you buy a condo, based on documents and rules, not the listing photos.

What Changed on August 3rd

(This reflects a Fannie Mae and Freddie Mac policy update that took effect August 3, 2026, the video's publish month; confirm current requirements with a lender, since these guidelines can change.) Back in March, Fannie Mae and Freddie Mac put out a joint policy update. There used to be a shortcut called a limited or streamlined review: if a buyer had strong credit and a solid down payment, the lender could mostly skip the deep dig into the building and approve based on the buyer alone. As of August 3rd, if the building has more than 10 units, the loan goes through a full review every time, regardless of the buyer's credit score, down payment, or reserves. The Community Associations Institute estimates limited reviews made up about 40% of all condo project reviews, so a large share of condo loans that used to close on buyer strength now depend on the building's strength instead. On the flip side, buildings with 10 units or fewer that are established and not part of a larger master association can skip the review matrix entirely, so small buildings just got easier while big ones got harder. That's worth knowing if you're comparing a small building against a large high-rise, since the loan process for otherwise similar units can now look very different depending on which side of that 10-unit line the building falls on. For most buyers looking at a typical mid-size or larger condo complex, the new reality is that loan approval is now partly out of your hands, which is exactly why the rest of this checklist matters.

Check the Reserves Behind the Dues

Reserves are the association's savings account for the expensive stuff: roof, elevators, plumbing, concrete. Under the new full review, the association's budget has to put at least 10% of assessment income into reserves, or rely on a reserve study under 3 years old, done by an independent professional, funded to that study's highest number. That percentage is scheduled to rise to 15% in January. An underfunded reserve account is a bill that hasn't arrived yet, and if the money isn't in reserves, it comes from you as a special assessment after you close. Yahoo Finance reported on a real estate agent in Georgia who listed her own condo for $239,000, had multiple offers in a week, then watched the deal fall apart because her building's reserves were underfunded and her buyers couldn't get conventional financing; she now figures she'd need to drop to around $150,000 to $165,000 to find a cash buyer. Ask for the current budget and the most recent reserve study during your contingency period, not the marketing packet. A thin reserve line isn't automatically a no, but it's a number you have to price in.

Litigation Can Sink the Whole Building

This is the one that traps people because you can't see it from the listing. Under Fannie Mae's rule, if the HOA is named in pending litigation involving safety, structural soundness, habitability, or functional use of the property, the entire project becomes ineligible for financing across every unit in the building. Mediation or arbitration heading toward a lawsuit counts too; there doesn't need to be an actual courtroom yet. When that happens, the building becomes what lenders call non-warrantable, meaning Fannie and Freddie won't buy the loan, leaving only a small pool of portfolio lenders with higher rates. That makes it hard to both buy into a building like this and sell out of one, since your future buyer inherits the same wall you climbed over. Sometimes the litigation is the board doing the right thing, like suing a developer over construction defects, but you still need to know it exists and price in the exit risk. Get it in writing from the property manager: any litigation, any pre-litigation mediation. If nobody will put it in writing, that's your answer.

The New Insurance Deductible Rule

Premiums on condo buildings roughly doubled between 2021 and 2025, from about $53 a door to $105 a door, with another 8% forecast this year; in Miami-Dade high-rises, insurance alone runs $377 to $480 per unit per month. When premiums exploded, a lot of boards raised their deductible to keep monthly costs down, a reasonable move at the time. But as of July 1st, if the master policy's per-unit deductible is over $50,000, the building is now non-warrantable. Boards that made a responsible financial decision two years ago may have unknowingly made every unit in the building harder to finance, with no notice sent to owners. Pull the master policy declarations page and check the per-unit deductible, and budget for your own HO6 policy to cover that deductible gap in most cases.

Run the Dues Through Your Debt-to-Income Ratio

Almost everybody compares purchase price; almost nobody runs the dues through their qualification. Your HOA payment goes into your debt-to-income ratio exactly like a car payment. Take two identical units: one with $400 dues, one with $900 dues. That $500 difference isn't just $500 a month out of pocket, at normal underwriting ratios it can knock roughly $80,000 to $90,000 off what you qualify for. Miami-Dade's median condo fee went from about $567 a month in 2019 to around $900 by 2024, a 59% jump in five years. After the Surfside building collapse, Florida associations now have to complete milestone inspections and structural reserve studies and can no longer waive reserves on major components like the roof, structure, fire protection, plumbing, electrical, waterproofing, windows, and doors above $10,000. Assessments coming out of that have run from $10,000 a unit to over $100,000 in older coastal buildings. Underwrite today's dues plus a realistic increase, and ask directly whether any assessment has been discussed, not levied, just discussed; the board meeting minutes will tell you what the budget won't.

Know How You'll Sell Before You Buy

Redfin called last summer the strongest buyer's market for condos since at least 2013, and according to Ice Mortgage Technology, condo prices fell about 1.7% last year, the wrong direction while many single-family homes moved the other way. It's extremely local: Seattle condos were down over 9% with inventory at a 14-year high, and one Florida city saw condo values drop 11% or more, while markets in the Northeast and Midwest have held up fine or set new records. None of that means condos are broken as a category, but it does mean the exit is harder than it used to be, and you're better off knowing that going in than discovering it in year two or three. Every risk covered here, thin reserves, litigation, a high deductible, makes a unit harder to sell later, so if you're paying full retail for a unit carrying that risk, you're taking on the seller's problem for nothing in return.

As a real estate agent for over 20 years, my homework for buyers is four documents: the current budget, the most recent reserve study, the master insurance declarations page, and the last 12 months of board meeting minutes. The minutes are the one document everybody skips, and it's usually where the truth is, since the budget shows where the board is spending and the minutes show where they're about to spend. Get all four during your contingency period, and get a lender who actually knows condo projects, since a good one can run the building through Fannie's system and tell you within a day whether it's warrantable. Condos aren't a bad buy, plenty of buildings have real reserves, no litigation, and boards that have managed things properly for years. You just have to know which one you're looking at, and the only way to know is to read the documents.