Condo loan rules for 2027: how each change hits your loan type

The condo loan rules for 2027 land differently depending on how a buyer pays. A conventional loan up to $1,249,125 feels every change directly. A jumbo or non-QM loan follows its own lender's rules. Cash skips the loan test but not the bills. Here is each 2026 to 2027 change, set against each loan type, for LA condos at $800,000 and up.

Most of these rules are about the building, not the borrower. For the basics of how a building passes or fails, start with warrantable vs non-warrantable condos.

The four ways buyers pay above $800,000

Conventional conforming and high-balance. Loans up to $1,249,125 in LA County for 2026 (FHFA). With 20% down, that covers prices up to about $1.56 million. These loans are sold to Fannie Mae and Freddie Mac, so every project rule applies. This is the band the new rules hit hardest.

Jumbo. Loans above $1,249,125. They aren't sold to Fannie or Freddie, so the agency rules don't apply by law. In practice, many jumbo programs already run a full project review and follow Fannie-style standards. Whether a given jumbo investor adopts the 15% reserve line is its own decision.

Non-QM and portfolio. Loans built for buildings and borrowers outside agency rules. Reported 2026 terms run 20% to 25% down (range 10% to 30%) at roughly 0.5 to 2 points above conforming rates. Serious structural problems and active litigation still limit most of these lenders. More on jumbo and non-QM condo loans in LA.

Cash. No project review. The same building issues still arrive as dues increases and special assessments, and they shape who can buy from you later.

For scale: in June 2026, 67% of LA metro purchases used a conventional conforming loan, 14% a jumbo and 19% were all cash, according to Redfin. Those figures cover all property types, since no public source splits condos by loan type.

The rules that change the most for conventional loans

The 15% reserve line

For Full Review loan applications dated on or after January 4, 2027, the association's budget must allocate at least 15% of annual assessment income to reserves, up from 10% (Fannie LL-2026-03; Freddie Bulletin 2026-C, both March 18, 2026). The alternative is a reserve study completed within three years, with the budget funding its highest recommended level. Since August 3, 2026, the baseline funding method doesn't count.

The date that counts is the loan application date, not the closing date. An application dated before January 4, 2027 is reviewed at 10%. Freddie says even an unexpired project approval must be rechecked under the new rule. Our condo reserve requirements page breaks down the math, and the reserve test runs it on a budget.

Full Review for every building over 10 units

Since August 3, 2026, Limited Review (Fannie) and Streamlined Review (Freddie) are gone. A building of 11 or more units gets a Full Review: the full condo questionnaire, the budget, the reserve study, the insurance and more. Trade groups estimate the change adds over $1,000 in borrower costs (Scotsman Guide, July 9, 2026). Buildings of 10 or fewer units may get a waiver instead.

Failed inspections as critical repairs

Fannie's critical repair rule includes failure of a mandatory state or local inspection, unfunded repairs over $10,000 per unit due within 12 months, and named items including balconies and parking structures. That is how a bad SB 326 balcony report or an open LA retrofit order can stop conventional lending in a building until the work is done or funded.

What loosened

The same March 18 package retired Fannie's 50% investor concentration cap and Freddie's owner-occupancy requirement for established projects, expanded the small-building waiver to 10 units, allowed roofs at actual cash value and capped the per-unit master deductible at $50,000. A building that failed for having many rented units can now pass on that point. The full condo insurance picture is on its own page.

Key dates

Trade groups asked FHFA in June and July 2026 for a one-year delay. An FHFA spokesperson said in June that Fannie and Freddie are implementing the policies on time (HousingWire, June 16, 2026), and we found no delay as of October 27, 2026. We'll update this page if that changes.

What it means if you're buying

1. Know your loan type before you shop: conforming or high-balance (up to $1,249,125) or jumbo.
2. Count the units. 10 or fewer may skip the conventional project review. 11 or more means Full Review.
3. Ask the lender to review the project early, before the offer if you can and before removing contingencies always.
4. Request the budget (reserve line and percent funded), the reserve study, the SB 326 report, the master insurance declarations, the condo questionnaire, 12 months of minutes, and any assessment or litigation notices.
5. Look for a reserve line under 15%, planned assessments, unfunded repairs, failed or missing inspections, retrofit orders, litigation, delinquency, and dues increases in the minutes.
6. If the building can't pass conventional review, ask what jumbo, portfolio or non-QM terms look like before deciding.
7. Keep the loan contingency in place until the lender has approved the project.

Our condo buyer checklist puts these in order, and the lendability checker and carrying cost calculator help with the numbers. The LA condo buying process guide covers the rest of escrow.

What it means if you're selling

Your buyer's lender will review the building, so see it first the way that lender will: unit count, review path, reserve line, SB 326 report, insurance, litigation and assessments. The association has 10 days to deliver the resale package after a written request, so ask early.

If the 2027 budget allocates less than 15% to reserves, ask the board whether it plans to fix that or rely on the reserve study path. Then price for the buyers who can close in your building, conventional, jumbo, non-QM or cash. The seller checklist lists the documents, and our sell your condo page covers how we list.

What it means for boards

The 2027 budget going out now decides how lenders test the building from January 4. The reserve line is a budget line item, so a vote can fix it. Fannie's Condo Status Finder lets boards and managers check the building's status, and Fannie updates that status when documentation shows a problem is fixed. The HOA board brief is written for this.

This page is general information about published agency guidelines, statutes and ordinances. It is not legal, tax, lending or insurance advice, and we are not lenders, attorneys or insurance brokers. Lenders apply their own overlays, and only a lender’s review decides whether a specific loan in a specific building works. Rules and dates change: confirm anything that affects a decision with your lender, attorney, insurance broker or association. Facts are current as of October 27, 2026.