"A condo that looked financeable last year may now need more documentation to qualify," Las Vegas mortgage advisor Matt Hennessy told the Las Vegas Review-Journal in May. Local broker Laura Harbison told the same paper what that looks like in a real deal. If the building doesn't meet the new guidelines, a purchase can fall apart in the third week of escrow, after the buyer has already paid for the inspection and appraisal.
That timing is the reason this matters. A conventional condo loan now depends on the unit, the buyer, and the association's finances. Lenders have to judge whether the project is eligible separately from judging the borrower. The next change to that test takes effect on January 4, 2027. It focuses on one line in the HOA budget: the share of income set aside for reserves.
The Line Moves on a Loan Application Date
In March 2026, Fannie Mae issued Lender Letter LL-2026-03, and Freddie Mac published a parallel Bulletin 2026-C the same day. The changes come in stages, and the stages build on each other:
- July 1, 2026. The master insurance policy's deductible can't exceed $50,000 per unit, and updated rules for individual HO-6 policies took effect.
- August 3, 2026. Fannie Mae retired Limited Review, the lighter review used for many established buildings. Those projects now go through Full Review or, if they qualify, a waiver. On the same date, any reserve study used to support a budget must be funded at its highest recommended allocation. The "baseline" method, which lets the reserve balance fall close to zero, is no longer accepted.
- January 4, 2027. Under Full Review, the minimum reserve allocation for capital expenditures and deferred maintenance rises from 10% to 15% of the association's annual budgeted assessment income. The rule applies to loan applications dated on or after that day. Freddie Mac's version uses the same date and the same increase.
These steps build on each other. Retiring Limited Review sent more established buildings into Full Review, and in January Full Review gets a higher reserve requirement. The test date is the date on the loan application. Closing day doesn't count.
Smaller buildings have a different route. Fannie Mae expanded its waiver of project review to projects with 10 or fewer units. Projects with 5 to 10 units can't be part of a master association. The 15% rule applies to Full Review buildings, so it mostly affects larger complexes.
What Five Percentage Points Look Like in a Real Budget
Here's a hypothetical. An association collects $1 million a year in assessments. At 10%, it needs $100,000 budgeted for reserves. At 15%, it needs $150,000. If the board budgets $120,000 this year, it meets the rule for applications dated in December and falls short for applications dated in January. The building, the units, and the dues are the same. Only the calendar changed.
A board can close a gap like that in two ways. It can raise reserve contributions, which usually means higher dues, or it can move money from other parts of the budget. Las Vegas has seen how quickly dues can rise when costs climb. In 2024, KTNV reported a proposed increase at the Vista Springs Three complex from $270 to $416 a month. Management cited higher insurance costs and future plumbing replacement, and the operating budget was projected to rise from about $1.7 million to nearly $2.8 million. That story predates the new rules and involves one complex. It shows where the money comes from when a budget has to change.
The Condo Market Was Already Softer Than the House Market
Las Vegas REALTORS' September 2026 report, released October 6, shows condos and townhomes trailing single-family homes on most measures.
| September 2026 | Condos and townhomes | Single-family homes |
|---|---|---|
| Median sale price | $290,000 | $470,000 |
| Change in median vs. September 2025 | Down 1.4% | Unchanged |
| Change in sales vs. September 2025 | Down 12.6% | Down 7.4% |
| Listed without offers at month-end | 2,796, up 7.3% | 7,995, up 6.6% |
| Change in total sales value vs. September 2025 | Down 14.4% | Down 10.3% |
In September 2026, the condo median was well below its record of $315,000 from October 2024. Across all property types, the market had about five months of supply, up from roughly four a year earlier. LVR attributes September's slowdown to rising mortgage rates. Nothing in the data shows the financing rules caused the condo gap. The rules do raise the stakes in a market where buyers have more choices. A building that can't support a conventional loan competes for fewer buyers. Harbison told the Review-Journal that a condo outside the guidelines may be limited to cash buyers, which shrinks the buyer pool and lowers the sale price. In September 2026, cash deals made up 23.5% of all local sales.
Nevada Already Puts the Reserve Number in the Buyer's Hands
Buyers don't have to wait for a lender to find out where a building stands. Under NRS 116.4109, a seller in a Nevada common-interest community generally must give the buyer a resale package at the seller's expense. The statute excludes sales that require a public offering statement and certain exempt sales. Several parts of that package bear directly on the January rule:
- The current operating budget and year-to-date financial statement. These must include a summary of the association's reserves. You can compare the reserve line with total assessment income to see the percentage.
- Proof of the association's required insurance. This shows how the master policy is set up, including the deductible that the July 2026 cap addresses.
- All current and expected fees and charges for the unit, including assessments.
- Any unsatisfied judgments or pending legal actions against the association.
- The full reserve study, on request. Buyers who have received a resale package can ask for it.
The timing rules matter for anyone planning a purchase around January. The association has 10 calendar days to provide its documents after the owner's written request. A resale package stays valid for 90 calendar days. After receiving it, the buyer can cancel the contract in writing until midnight on the fifth calendar day, with no penalty and a prompt refund of payments. The statute caps the certificate fee at $185, plus up to $100 to have it delivered in under 3 business days. Both caps can rise each year with inflation, by no more than 3%.
The reserve summary is part of the package that starts that five-day window. That means the budget figures reach the buyer through the statute itself, not only through the lender's review that Harbison described in the third week of escrow. When the package arrives during a particular escrow depends on the contract and the association.
For Sellers, the Weeks Before January Count
This post publishes on October 29, a little over nine weeks before January 4. If your association's reserve allocation falls between 10% and 15%, a conventional buyer whose loan application is dated before January 4 is tested against the current minimum. After that date, the same buyer faces the higher one.
Harbison's advice in the Review-Journal was to get ahead of it. Sellers can request the Condominium Certification, the form lenders send to the association, before listing. Sellers who confirm their unit is eligible for financing "will have an advantage and attract more potential buyers." Ordering the resale certificate early has a similar benefit. The 90-day validity period covers a listing that starts now and closes in the new year.
For Buyers, the Offer Has to Leave Room
Hennessy told the Review-Journal that buyers may face more upfront costs from requesting HOA budgets, reserve studies, insurance declarations, and legal documents before a lender approves the loan. Agent Steve Ord said more full reviews mean "more paperwork, more back and forth with HOAs, and longer escrows." Agent Christina Stockdale said a well-structured offer, "whether that means longer loan contingencies or closing timelines, can make all the difference."
If a building doesn't meet conventional standards, Hennessy said buyers may look at FHA, VA, or non-warrantable loan programs. FHA's 2026 condo change was administrative, about how case numbers are assigned. HUD said it did not expand the condo program. You can look up a building's FHA status yourself with HUD's FHA-approved condominium search, which searches by location, project name, or status.
A Few Questions Buyers and Sellers Ask
Does the January rule apply to townhomes? The rules govern condo project review, and Nevada's resale package applies to units in common-interest communities generally. Whether a specific townhome community counts as a project for loan purposes is a question for your lender.
My building has eight units. Does any of this apply? Fannie Mae's waiver of project review now covers projects with 10 or fewer units. Projects with 5 to 10 units can't be part of a master association.
Did the investor rules change too? Yes. Fannie Mae retired the 50% investor-concentration limit for established projects under Full Review. The 50% presale requirement for new projects still applies.
What about my own insurance policy? The deductible on an HO-6 policy can't exceed the greater of 5% of its coverage or $2,500.
This post is general information, not legal, financial, or lending advice. Every building and loan file is different, so confirm your situation with your lender, the association, or an attorney before you act.
If you're thinking about listing a condo before January or writing an offer on one this fall, the reserve line in the HOA budget is a good place to start, and I'm happy to read it with you. Florianne May Turla can help you request the documents early and plan your contract dates around January 4. Let's Connect.
