What changed on August 3, 2026
Two things moved at once. The minimum HOA reserve allocation for conventional eligibility went from 10% to 15% of annual assessment income. And the streamlined Limited Review pathway — the short questionnaire lenders used for established buildings — was eliminated for buildings with more than 10 units, which pushes those purchases into Full Review.
Full Review means the lender collects the HOA's budget, financial statements, reserve study, delinquency report, board meeting minutes, and master insurance policy. Any one of those documents can surface a problem that stops the loan.
The reserve ratio is one line of division
Both numbers sit on the HOA's annual budget, which the listing agent can usually produce in a day. Running this before you write an offer costs nothing; discovering it in week three of escrow can cost you the deal and your inspection money.
The tests that aren't about reserves
Reserves get the headlines, but a building can be well-funded and still fail. Conventional guidance generally expects at least half the units to be owner-occupied as primary or second homes, and a delinquency rate above roughly 15% of owners is a common disqualifier. Pending litigation involving the structure or safety of the building is another.
Because reserve funding is a board decision, non-warrantable status isn't permanent — an HOA that votes to raise dues and lift reserve contributions can restore eligibility. That takes months, not weeks, so it matters more for a building you already own in than one you're bidding on.
Read the full guide: What the August 2026 condo mortgage rules mean for buyers →
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What “non-warrantable” actually means for you
Warrantable means Fannie Mae or Freddie Mac will buy a loan secured by a unit in that project. Non-warrantable means they won’t — and since almost every conventional lender sells its loans, a non-warrantable building closes off conventional financing entirely.
That is not the same as unfinanceable. Portfolio lenders keep loans on their own books and set their own rules, so a non-warrantable condo can still be bought. What changes is the price. Expect a meaningfully higher rate, a larger down payment — often 20–25% where conventional would have taken 5% — and a much shorter list of lenders willing to quote. Budget for the financing before you fall for the unit.
Who answers these questions, and when to ask
None of this comes from the listing. It comes from the condo questionnaire, a form the HOA or its management company completes for the lender, usually for a fee and usually taking one to three weeks. The reserve figure, the single-entity percentage, the delinquency rate, the litigation disclosure — all of it lives there.
The timing trap is that the questionnaire typically goes out after you are under contract, which means the building can fail a test you could have checked earlier. Before you write the offer, ask the listing agent for the HOA budget and the most recent reserve study. The budget alone gives you the reserve-contribution line this calculator needs, and it costs nothing to request.
Ask the HOAAnnual budget
Shows total assessment income and the line contributed to reserves — the two numbers the reserve test turns on.
Ask the HOAReserve study
The professional assessment of what the building will need and when. A study showing a large near-term shortfall is a warning even if the ratio passes.
Ask the HOADelinquency rate
What share of units are behind on dues. High delinquency is a reserve problem arriving later.
Ask the agentSpecial assessments
Pending or recent assessments signal reserves that were insufficient. They also hit your budget directly.
If the building fails
A failed test is not always permanent. A project under the reserve threshold can raise its contribution at the next budget and pass the following year. Litigation that is minor and insured often stops being disqualifying once resolved. Single-entity ownership falls as an investor sells units.
What you can do about it depends on which test failed. Reserves and delinquency are HOA-governance problems you have no control over as a buyer, so the realistic options are a portfolio lender, an FHA-approved project if the building is on HUD’s list, or a different building. Structural-integrity and deferred-maintenance findings are the ones to treat as hard stops — those are the conditions the 2026 rules were written to catch, and a lender declining over them is doing you a favour.
Run your numbers above, then check what the financing costs either way with the payment calculator, or compare down payment paths with the down payment size calculator if a portfolio lender wants 20% instead of 5%.
Frequently asked questions
What is the 15% reserve rule?
Conventional guidance raised the minimum HOA reserve allocation from 10% to 15% of annual assessment income effective August 3, 2026. A building below that threshold, with no qualifying reserve study, is likely to be treated as non-warrantable.
Does a reserve study override the 15% figure?
Yes. If the HOA has a reserve study prepared within roughly the last three years by a qualified professional, lenders can use the study's recommended allocation instead of the flat 15% threshold — whether that figure is higher or lower.
Why does the number of units matter?
The streamlined Limited Review pathway was eliminated for buildings with more than 10 units. Those buildings now require Full Review, which means the lender collects the HOA's complete financial package rather than a short questionnaire.
What happens if the building fails?
Conventional financing generally becomes unavailable. Portfolio loans from banks and credit unions can finance non-warrantable condos, but typically require a larger down payment and carry a higher rate. FHA spot approval may be another path.
Where do I find these numbers?
Ask the listing agent or the HOA's management company for the current annual budget. Annual assessment income and the reserve contribution line item are both on it. Board meeting minutes and the delinquency report cover the rest.
What is a non-warrantable condo?
A project Fannie Mae and Freddie Mac will not buy a loan against, usually because of insufficient reserves, high investor ownership, high dues delinquency, pending litigation, or significant deferred maintenance. Units in those buildings can still be financed through portfolio lenders, typically at a higher rate and with a larger down payment.
Can I get a mortgage on a non-warrantable condo?
Yes, through a portfolio lender that keeps the loan rather than selling it. Expect a higher rate, often 20 to 25% down instead of 5%, and far fewer lenders willing to quote. Confirm the financing before going under contract, not after.
How do I find out a condo’s reserve percentage before I make an offer?
Ask the listing agent for the HOA’s annual budget and most recent reserve study. The budget shows total assessment income and the amount allocated to reserves, which is all this calculator needs. The formal condo questionnaire comes later, usually after you are under contract, which is too late to learn the building fails.