Condominium lending can unlock valuable opportunities for borrowers, but for mortgage professionals, it also introduces a distinct layer of project‑level risk. From eligibility standards to documentation nuances, understanding how condominiums are reviewed is critical to keeping loans on track. That’s why knowing the differences between Full and Limited Condominium Reviews, and when each applies, is essential for anyone supporting the mortgage lifecycle.
Donna Muratalla, Regional Underwriter at Enact, dives into the ins and outs of Full and Limited Condominium Reviews to help prevent closing delays, repurchase risk, or the derailing of an otherwise qualified loan. Stay in the know to understand the Fannie Mae requirements for these reviews and help improve borrower outcomes.
Understanding condominiums and how lenders play a key role
A condominium is an individually owned unit within a larger project where owners share common elements and pay association fees. While borrowers own their units, lenders must evaluate the entire project to confirm eligibility. This includes reviewing project viability, governance, financials, and legal structure, not just the unit securing the mortgage.
A project is considered established when all of the following are true:
- At least 90% of the total units in the project have been conveyed to unit purchasers
- The project is 100% complete including all units and common elements
- The project is not subject to additional phasing or annexation
- Control of the HOA has been turned over to the unit owners
A project is considered new when one or more of the following are true:
- Fewer than 90% of the total units in the project have been conveyed to unit purchasers (or 80% if it meets the exception outlined on Fannie Mae here)
- The project is not fully completed, such as proposed construction, new construction, or the proposed or incomplete conversion of an existing building to a condo
- The project is newly converted
- The project is subject to additional phasing or annexation or
- HOA is still under the developer’s control
For more information on project types and requirements, seek out Fannie Mae’s Selling Guide here.
What documentation is needed for these condos?
The project documentation may vary based upon the project and review type. Lenders are responsible for determining the documentation needed to ensure that the project meets eligibility requirements.
Project documentation may include, but are not limited to:
- Legal and recorded documents including the covenants, conditions and restrictions, declaration of condominium or other similar documents which establish the legal structure of the project
- Project budgets, financial statements, or reserve studies
- Project construction plans
- Architects’ or engineers’ report
- Completion reports
- Project marketing plans
- Environmental hazard reports
- Attorney’s opinions
- Appraisal reports
- Evidence of insurance policies and related documentation and
- Condominium Project Questionnaire
Keep in mind, not all projects are eligible, so also review the guidelines and document requirements on those project specifics.
Conquer Condominium Full and Limited Reviews
Full Review: when deeper analysis is required
A Full Condo Review may be required when the unit is an attached condo in:
- An established project, or
- A new or newly converted project
Full Reviews involve a comprehensive evaluation of the project, including:
- Project budgets and reserve funding
- HOA delinquency ratios
- Insurance coverage
- Project completion and phasing
- Ownership concentration and occupancy ratios
- Legal documents and lender protections
For new or newly converted projects, additional scrutiny applies. Projects must be substantially complete, meet presale thresholds, and provide completion assurances when not fully built. Legal documents must also protect lender rights related to foreclosure, insurance proceeds, and amendments. Always refer to the guidelines via Fannie Mae here for more clarification.
Limited Review: a streamlined option with boundaries
A Limited Review may apply when the unit is an attached condo in an established project. While less documentation is required, lenders are still responsible for confirming key eligibility factors.
Limited Reviews focus on:
- Confirmation that the project meets general condo standards
- Ensuring the project is not ineligible
- Verifying HOA delinquency thresholds
- And applying LTV limits based on occupancy type
It’s important to note that Limited Reviews are not available for manufactured housing projects and may have additional geographic restrictions. Leverage the more in-depth information available from Fannie Mae on the Limited Review process. Their guidelines hold the most up to date requirements and are a great resource when you need it most.
What's at stake if condo reviews go wrong
Condo eligibility risk is fundamentally different from borrower credit risk. Even a strong borrower can be affected by a project that fails to meet Fannie Mae requirements. Lenders are responsible for confirming that a condo project meets eligibility standards—and that responsibility doesn’t disappear if a review is waived or limited.
Common risk areas include:
- Financial instability of the homeowners association (HOA)
- Inadequate insurance coverage
- Pending litigation tied to safety or structural soundness
- Restrictions in project documents that limit resale or foreclosure rights
- And high delinquency rates on HOA dues or special assessments
For mortgage professionals, these risks can create friction across the loan lifecycle. Loan officers may face last‑minute surprises. Processors and operations teams may scramble to gather missing documentation. Underwriters must balance speed with compliance. Without a strong working knowledge of Full vs. Limited Condo Reviews, teams are exposed to unnecessary risk.
More ways we at Enact can help
Condominium lending doesn’t have to slow you down. By building a strong foundation in Full and Limited Condo Reviews, mortgage professionals can reduce risk, improve loan flow, and better support borrowers navigating condo purchases or refinances. Knowledge is critical, and in condo lending, it’s also protection.
That’s why it’s important to keep the conversation going, because when we understand the tools available, we can empower more families to achieve the dream of homeownership. Our Regional Underwriting Team is available to assist you Monday-Friday 8am to 8pm ET at 800-444-5664 option 2.
Enact also offers a suite of tools—including Rate Express®, Underwriting Resources, and training resources to help you along the mortgage origination journey.
Source: Donna Muratalla is a Regional Underwriter at Enact Mortgage Insurance.
The statements in this article are solely the opinions of Donna Muratalla and do not necessarily reflect the views of Enact or its management. Lenders should consult their own legal and compliance advisors when interpreting applicable guidelines.
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