Mortgage Programs
Condo Financing Explained
Why condo loans involve reviewing the association as well as the borrower, what a project review checks and how to avoid a late surprise.
Updated 2026-08-17| Applies to: Buyers financing a condominium unit or refinancing one they own.
The short answer
With a condo, the lender approves both you and the association. A project review looks at owner occupancy, budget and reserves, insurance, litigation and how much of the project one owner controls.
What a project review examines
- Percentage of units owned by investors versus owner occupants
- Delinquent HOA dues across the association
- Budget adequacy and reserve funding for major repairs
- Master insurance coverage, including fidelity and liability
- Pending litigation involving the association
- Concentration of units owned by a single entity
Warrantable and non warrantable
A project that meets agency standards is called warrantable and qualifies for conventional financing. Projects that fail one or more tests are non warrantable and require portfolio or non agency financing, generally with a larger down payment and different pricing.
Timing matters
Association documents can take time to obtain, and questionnaires often come back with an item that needs clarification. Ordering the review early is the single best way to protect a closing date.
Questions worth asking before you offer
- 1.What are the current monthly dues, and when were they last increased?
- 2.Is a special assessment planned or under discussion?
- 3.What percentage of units are rentals?
- 4.Is the association involved in any litigation?
- 5.How much is in the reserve fund relative to the reserve study?
Project eligibility standards vary by program and change over time.
Common mistakes to avoid
- Waiting until late in the process to order the condo questionnaire
- Assuming a unit is financeable because a neighbor closed a loan there last year
- Ignoring a pending special assessment that affects both affordability and eligibility
Frequently Asked Questions
People also ask
Can I switch from FHA to conventional later?
Many borrowers refinance from FHA to conventional once they have enough equity and qualifying credit, which can remove ongoing mortgage insurance, though refinancing has its own costs to weigh.
Read: FHA vs Conventional Loans: How Do They Compare?What is the conforming loan limit in Ohio?
Conforming loan limits are set annually and can vary slightly by county, so it is best to confirm the current limit for the specific county where you are purchasing.
Read: Jumbo Mortgage Options in Ohio: What to KnowIs an ARM riskier than a fixed-rate mortgage?
An ARM carries more uncertainty about future payments since the rate can change after the introductory period, while a fixed rate removes that uncertainty entirely.
Read: Fixed-Rate vs Adjustable-Rate Mortgage: Which Fits You?Are closing costs the same for every loan program?
No. Some programs have specific limits on certain fees or allow different levels of seller contribution, so costs can vary by program even for the same purchase price.
Read: How Much Will My Closing Costs Be?Does everyone have an escrow account?
Not always. Some borrowers, especially with larger down payments on conventional loans, may be able to pay taxes and insurance on their own, though many lenders still require escrow, particularly for FHA and VA loans.
Read: What's Included in My Mortgage Payment?Can a green card holder get a conventional loan?
Often yes, subject to the same income, credit, and asset requirements as other conventional loan applicants, along with proof of permanent resident status.
Read: Mortgage Options for Immigrants and Non-Citizens in OhioTerms used in this guide
- HOA
- A homeowners association that maintains shared areas and enforces rules, funded by dues that lenders include in your qualifying payment.
- Condominium
- A property where you own a unit and share ownership of common areas. Lenders review the association's budget, insurance and owner occupancy before approving financing.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
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