If you own, are buying, or are selling a California condo, you need to read this. On August 3, 2026 — weeks from today — Fannie Mae is implementing 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 is about to make conventional condo financing significantly harder to obtain across the state. See: DSCR guide.

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

What Is Changing on August 3, 2026?

Fannie Mae is eliminating the Limited Review condo approval process for buildings with 11 or more units. Currently, Limited Review is a streamlined path to condo approval that allows lenders to complete a quick, limited analysis of an HOA without the comprehensive Full Review process. Starting August 3, every condo loan in an 11+ unit building will require 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 will now face Full Review scrutiny — and many will fail.

Why This Hits California Especially Hard

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

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

What This Means If You’re Buying a Condo Before August 3

Act immediately. If you are currently in escrow or planning to buy a condo in a building with 11 or more units, your lender needs to complete the condo approval process under current Limited Review guidelines before August 3. Deals that are mid-process when the rule changes hit may need to restart under Full Review requirements — potentially adding weeks of delay and creating new approval hurdles.

Call us at 800-239-1103 right now if you have an open condo purchase. We will prioritize getting your HOA approval completed before the deadline.

What This Means If You’re Selling a Condo

After August 3, your pool of conventional buyers may shrink 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, lock your rate and complete the process before August 3 if at all possible. After that date, your building faces Full Review — and 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 process refinances quickly for borrowers in clean buildings. Call us today.

Non-Warrantable Solutions After August 3

For buyers, sellers, and homeowners in buildings that fail Full Review after August 3, 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 will adapt — but the transition period starting August 3 will be disruptive, and buyers and sellers who are prepared will have significant advantages over those who aren’t.

Act Now — The Deadline Is Real

August 3, 2026 is not a soft deadline. Fannie Mae rule changes are implemented system-wide and affect every lender that sells loans on the secondary market. This is happening regardless of your specific situation — the only question is whether you’re prepared.

DiVita Home Finance is helping California condo buyers, sellers, and homeowners navigate both SB 326 and the August 3 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. The window to close under current rules is closing fast. Also see our full SB 326 condo financing guide for all available programs.

Related Resources

More SB 326 Resources

About DiVita Home Finance

DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.

We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.

📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124

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