Condos are one of the most popular ways to break into homeownership, offering the benefits of owning without the exterior upkeep and often at a lower price. But before making an offer, it’s worth doing your homework. How well an HOA (homeowners association) funds its reserves, whether a building has deferred maintenance, and what the master insurance policy covers all shape what you’ll pay after closing.
New condo review rules from Fannie Mae and Freddie Mac mean nearly every purchase now gets a closer look, so it pays to ask the right questions early.
5 questions that matter more than the unit
A stunning kitchen can’t tell you if the roof needs replacing next year. Before you fall in love with a condo, here’s what to ask:
1. How will new condo review rules affect your timeline?
As of August 2026, Fannie Mae and Freddie Mac eliminated the Limited Review option that previously let many condo buyers with a sizeable down payment skip a full building review. Now, nearly every condo purchase, regardless of down payment, requires a complete look at the HOA’s financials, reserve funding, and insurance coverage.
| What changed | Before | Now |
|---|---|---|
| Building review | Many buyers could skip a full review with a strong down payment | Nearly all condo purchases require a full review |
| Reserve funding | 10% of HOA budget | Rising to 15% of HOA budget (effective January 2027) |
| Master insurance deductible | No standard cap | Capped at $50,000 per unit |
In practice, this means condo closings may take longer than they used to since lenders now need more documentation from the HOA upfront. Buyers who plan for the extra time, and who work with a lender already experienced in gathering condo documentation, are far less likely to be caught off guard.
Questions about closing on a condo? We’re here to help.
2. How healthy are the HOA’s reserves?
Condos remain an appealing entry point into homeownership based on price alone. The national median condo price was recently listed as $372,000, compared to about $440,000 for a single-family home. But that lower price tag only tells part of the story: The real cost of owning a condo depends heavily on how well the building is managed.
Every homeowners association is required to set aside money for major repairs down the road, things like roofs, elevators, plumbing, and structural work. This reserve fund is essentially the building’s savings account for the future. If it’s underfunded, owners often get hit with a special assessment to cover the gap, sometimes for tens of thousands of dollars per unit.
If you’re getting serious about a condo, ask for:
- A copy of the most recent reserve study
- The HOA’s current annual budget
- The percentage of the budget allocated to reserves (the new minimum is increasing to 15%)
- Whether the association has ever deferred contributions to reserves in past years
A healthy reserve fund, and a board that takes it seriously, is one of the clearest signs you’re buying into a well-managed community.
3. Has the building had a history of deferred maintenance?
Postponed repairs don’t disappear. They resurface later as bigger, more expensive problems, often paid for through special assessments. Ask what repairs have been completed recently and what’s scheduled next, then review recent board meeting minutes. A pattern of “we’ll get to it later” is worth taking seriously since it may signal larger costs on the horizon.
4. Is a special assessment being discussed?
Don’t just ask whether a special assessment is planned; ask whether one has been discussed. Meeting minutes often reveal conversations happening well before an official notice ever goes out. Getting ahead of that information can help you negotiate, budget appropriately, or simply go into the purchase with eyes open.
5. What does the master insurance policy actually cover?
The HOA’s master policy typically covers shared spaces and the building’s structure, but it rarely covers everything inside your individual unit. Many associations are also tightening budgets right now, which can mean lower coverage limits or higher deductibles on the master policy than in years past.
Before closing, be sure to:
- Request a full copy of the master insurance policy
- Confirm the current deductible (new rules cap it at $50,000 per unit, but many are lower)
- Ask what’s excluded; flooring, fixtures, and interior walls are common gaps
- Share the policy with your insurance advisor to determine what additional coverage you need
Most buyers need a separate policy, often called an HO-6 or “walls-in” policy, to cover their personal belongings, interior finishes, and liability. This is a great conversation to have with your Cornerstone Insurance agent early in the process.
The takeaway: Buying a condo isn’t just finding a unit you love. It’s about understanding the community you’re moving into. That’s where an experienced loan officer comes in. Our loan officers work alongside your real estate agent from the very first conversation, helping request condo documentation upfront, identify potential red flags in an HOA’s financials, and keep your closing on track even under the new review requirements.
Thinking about buying a condo?
Talk to a local loan officer before you make an offer. Asking a few questions now could save you later.
For educational purposes only. Sources deemed reliable but not guaranteed.
You’re receiving this resource from your loan officer, who operates within the lending division of Cornerstone Capital Bank, a full-service financing institution.
Cornerstone Capital Bank is the parent organization that brings together multiple affiliated lending teams, providing shared resources, solutions, and long‑term support to help clients make confident financial decisions now and in the future.