I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. Call (800) 239-1103.

If you own, are buying, or are selling a California condo, you need to understand what changed on August 3, 2026. Fannie Mae implemented one of the most significant changes to condo financing guidelines in recent memory. Combined with the ongoing disruption from California’s SB 326 balcony inspection law, this rule change has made conventional condo financing significantly harder to obtain across the state. See: DSCR guide.

Here’s exactly what changed, what it means for you, and what to do about it.

What Changed on August 3, 2026?

Fannie Mae eliminated the Limited Review condo approval process for buildings with 11 or more units. Previously, Limited Review was a streamlined path to condo approval that allowed lenders to complete a quick, limited analysis of an HOA without the comprehensive Full Review process. As of August 3, every condo loan in an 11+ unit building requires Full Review.

Full Review means the lender must analyze and approve:

HOA financial health — reserve fund levels, delinquency rates, budget adequacy
Reserve fund minimum — HOAs must be tracking toward a 10% minimum reserve threshold
Deferred maintenance — any known deferred maintenance is now a formal underwriting flag
Owner-occupancy ratio — the percentage of units owner-occupied vs. rental must meet Fannie Mae thresholds
HOA litigation — any active litigation creates an automatic denial
SB 326 compliance — inspection status, findings, funded repair plans

Buildings that previously sailed through Limited Review now face Full Review scrutiny — and many are failing.

Why This Hits California Especially Hard

California’s condo market was already dealing with significant SB 326 disruption. The August 3 rule change adds another layer of complexity:

Buildings that had minor SB 326 issues being quietly handled now face formal Full Review documentation requirements
HOAs with inadequate reserve funds — very common in older California buildings — are failing the 10% reserve threshold
Older California buildings with known deferred maintenance (routine in buildings 30–50 years old) are flagging during Full Review
Owner-occupancy ratio requirements are affecting investor-heavy buildings in markets like Palm Springs, Downtown LA, and parts of San Francisco

What This Means If You’re Buying a Condo Now

If you are in escrow or planning to buy a condo in a building with 11 or more units, your lender must now complete Full Review on the HOA. Deals that would have previously moved quickly under Limited Review may now take longer or face new approval hurdles.

Call us at 800-239-1103 if you have an open condo purchase. We will assess your building’s Full Review eligibility and identify alternative programs if needed.

What This Means If You’re Selling a Condo

Your pool of conventional buyers may be limited if your building has any of the following:

SB 326 inspection not completed
SB 326 deficiencies found but not fully funded
HOA reserve fund below the 10% minimum threshold
Known deferred maintenance items
Active HOA litigation of any kind
Owner-occupancy below Fannie Mae thresholds

Price your listing accordingly and disclose proactively. Work with a listing agent who understands the financing landscape and can identify which buyers will be able to obtain financing for your building.

What This Means If You Own a Condo and Want to Refinance

If you are considering a conventional refinance, your building now faces Full Review. If your HOA has any of the flags listed above, your refinance may be denied on the building review rather than your personal financials. We can assess your building’s eligibility and identify portfolio or non-QM alternatives if needed.

Non-Warrantable Solutions After August 3

For buyers, sellers, and homeowners in buildings that fail Full Review, the same non-warrantable financing tools apply:

Portfolio lender loans — 0.50–1.25% rate premium, no agency approval required
Non-QM condo programs — up to 80% LTV, flexible documentation
FHA spot approval — for eligible units where individual unit approval is possible
DSCR loans — for investors purchasing rental condos

The market is adapting — but the disruption from the August 3 rule change is real, and buyers and sellers who understand the landscape have significant advantages over those who don’t.

Get Help Navigating the New Rules

DiVita Home Finance is helping California condo buyers, sellers, and homeowners navigate both SB 326 and the August 3 Fannie Mae rule change across Palm Springs, San Francisco, Los Angeles, Orange County, Marin County, the East Bay, San Diego, and all of California.

Call 800-239-1103 today — or apply online now. Also see our full SB 326 condo financing guide for all available programs.

Related Resources

More SB 326 Resources

Frequently Asked Questions

What did Fannie Mae change about condo financing on August 3, 2026?

Fannie Mae eliminated the Limited Review condo approval process for buildings with 11 or more units. All condo loans in 11+ unit buildings now require Full Review, which includes analysis of HOA financial health, reserve fund adequacy (10% minimum threshold), deferred maintenance, owner-occupancy ratios, active litigation, and SB 326 compliance. Buildings that previously qualified under the faster Limited Review process now face significantly more scrutiny.

Which condo buildings are most affected by the August 3, 2026 Fannie Mae rule change?

Buildings with 11 or more units are affected. In California, the most at-risk buildings are older HOAs with inadequate reserve funds, buildings with SB 326 inspection findings not yet fully funded, properties with active HOA litigation, and investor-heavy communities with owner-occupancy below Fannie Mae thresholds. Older California buildings are particularly vulnerable due to deferred maintenance flags.

What are my mortgage options if my condo building fails the new Fannie Mae Full Review?

Several non-warrantable financing options exist: portfolio lender loans (typically 0.50–1.25% rate premium above conforming, no agency approval required), non-QM condo programs (up to 80% LTV with flexible documentation), FHA spot approval for eligible individual units, and DSCR loans for investors. DiVita Home Finance specializes in non-warrantable condo financing across California.

Talk to Michael Directly

DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.

📞 (800) 239-1103

💬 Text: (310) 849-9124

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August 3, 2026: Fannie Mae Condo Rule Change — What Every California Condo Buyer Must Do Right Now