If you’re buying or selling a condo on the Seattle Eastside, 2026 brings one of the biggest lending shifts in years — and most buyers have never even heard the term that could decide whether they qualify.
If you sell condos — or have buyers considering one in Bellevue, Kirkland, or Redmond — this is one of the biggest lending changes you’ll see in 2026. Most buyers have never heard the term “warrantable condo,” but it can determine whether they qualify for conventional financing at all.
Think of a condo association like a family that owns a house together. If they save for repairs, maintain the property, and pay their bills, lenders are comfortable making loans. If they don’t, the building may be considered non-warrantable — meaning the buyer may qualify, but the building does not.
What’s Changing?
Two dates on the calendar matter most. Both come from updated Fannie Mae condo project standards.
August 3, 2026
The streamlined “Limited Review” process disappears. Most condo loans on projects with more than 10 units will require a Full Review of the HOA’s finances, reserves, insurance, special assessments, litigation, and deferred maintenance.
January 4, 2027
The minimum reserve contribution rises from 10% to 15% of the budget — unless the association has a current reserve study and is funding reserves accordingly.
Why It Matters
FOR BUYERS
- •More documentation required
- •Longer financing timelines
- •Some buildings that qualified yesterday may not qualify tomorrow
- •Higher HOA dues as associations strengthen reserves
FOR SELLERS
If a building becomes non-warrantable, the buyer pool shrinks dramatically. Instead of every conventional buyer competing, financing may be limited to:
- •Cash buyers
- •Portfolio lenders
- •Specialized non-warrantable financing
Less financing availability often means fewer offers and greater pressure on pricing.
There Is Some Good News
Not every change is restrictive. Fannie Mae has also:
- ✓Eliminated the 50% investor-concentration limit, which may help financing in some urban and investor-heavy buildings.
- ✓Expanded the Waiver of Project Review for certain projects with 10 or fewer units, simplifying financing for some smaller communities.
And remember: non-warrantable does not always mean unfinanceable. Many portfolio lenders offer financing for these properties, and well-qualified buyers with good credit, stable income, and 15% or more down may still have excellent options. In some cases, less competition can even create a buying opportunity.
Before You Write an Offer, Ask:
Condo financing has always been unique because both the buyer and the building have to qualify. With these new guidelines, reviewing the project early could be the difference between a smooth closing and a last-minute surprise — especially in a competitive Eastside market.