If you have been debating whether to sell your condo, 2026 may be a good time to take a serious look at your options.
New conventional mortgage guidelines are changing how condominium projects are reviewed. Beginning in 2027, one of the biggest changes will be stricter requirements around how much money condo associations set aside for future repairs and major expenses.
That could matter when it comes time for the next buyer to finance your condo.
What Is Changing for Condos in 2027?
Beginning with applicable loan applications dated January 4, 2027, Fannie Mae is increasing its replacement-reserve requirement for condo projects undergoing a Full Review.
Today, an HOA budget generally needs to allocate at least 10% of its annual assessment income toward replacement reserves.
That minimum is increasing to: 15%
In other words, a condo association that meets today’s financing requirements may not necessarily meet the same requirements in 2027.
Fannie Mae has also strengthened its requirements when an HOA uses a reserve study to demonstrate that it has adequate reserves.
Why Could This Matter If You Want to Sell Your Condo?
Most condo owners don’t think about their HOA’s reserve budget when they put their home on the market.
Buyers’ lenders do.
When someone buys a condo using conventional financing, the lender may need to review not only the buyer but also the condo project itself.
That can include things such as:
- HOA finances and reserves
- Insurance coverage
- Deferred maintenance
- Special assessments
- Delinquent HOA dues
- Pending litigation
- Overall project eligibility
If a project doesn’t meet the applicable requirements, financing the units within that project can become more difficult.
And fewer financing options can mean a smaller pool of potential buyers.
Does This Mean Every Condo Should Be Sold Before 2027?
No.
Plenty of Utah condo communities are financially healthy and may have no problem meeting the updated requirements.
Some associations may already be contributing 15% or more toward reserves. Others may have an acceptable reserve study or take steps to adjust their budgets before the new requirement takes effect.
So this is definitely not a prediction that condo values are going to fall in 2027.
But if you have already been thinking about selling your condo, the upcoming changes are another reason to have that conversation sooner rather than later.
Selling a Utah Condo? Check the HOA Before You List
Before you sell your condo, it may be worth finding out how your HOA currently looks from a mortgage-financing perspective.
A few simple questions can tell us a lot:
How much is the HOA contributing to reserves?
Does the project have a recent reserve study?
Are there any major special assessments or deferred-maintenance issues?
Does the project currently qualify for conventional financing?
Finding out before accepting an offer is much better than discovering a financing problem three weeks into a transaction.
Thinking About Selling Your Condo?
If you own a condo in Utah and have been debating whether to sell, 2026 may be a good year to explore your options.
That doesn’t necessarily mean you need to put it on the market tomorrow.
It does mean it is worth understanding how the upcoming 2027 financing changes could affect your condo project and the buyers who may eventually want to purchase your unit.
Reach out to the Houzd Mortgage team. We can help you review the financing side of your condo project and connect you with a real estate professional who can help you understand your selling options.
Sometimes the best first step isn’t listing the condo.
It’s simply finding out where you stand.