Fannie Mae Retired Limited Review: What Denver Condo Deals Look Like Now
- Jerad Larkin
- 5 days ago
- 7 min read
A Denver condo deal that would have closed on schedule in July can stall in August for a reason that has nothing to do with your buyer's credit, your contract, or your price. On August 3, Fannie Mae retired the Limited Review pathway for condominium projects. Every conventional loan on a project with more than 10 units now runs through a Full Review of the association's finances.
That lands hard in Denver Metro, because attached homes were already the softest part of this market. If you list or sell condos and townhomes here, the HOA's paperwork just became part of your listing prep instead of a post-inspection surprise.
What changed for Denver condo financing on August 3, 2026?
Fannie Mae retired Limited Review, so conventional loans on Denver Metro condo projects with more than 10 units now require a Full Review of the HOA budget, reserves, insurance, litigation, and special assessments.
I am Jerad Larkin, a Sales Executive with Chicago Title Colorado, and I spend my days with Denver Metro real estate agents on the part of a transaction that happens after the contract is signed. Since the first week of August, almost every condo question I get is a version of the same one: why is my lender suddenly asking the HOA for documents nobody asked for in the spring?
Here is the short version. Fannie Mae published Lender Letter LL-2026-03 and set August 3, 2026 as the date Limited Review goes away. Industry reporting put Limited Review at roughly 40 percent of all condo project reviews before the change, citing the Community Associations Institute. That volume did not disappear. It moved into Full Review, which asks far more of the association and takes longer to clear.
What Exactly Did Fannie Mae Change on August 3?
The change is about the project, not the borrower. Your buyer can have a 780 score, 20 percent down, and clean income, and still get slowed down by an association that cannot produce a current reserve study.
What Limited Review Used to Do
Limited Review was the fast lane. On an established project, if the buyer put enough money down, the lender could skip most of the project-level questions and underwrite the borrower and the appraisal. Reserve funding, litigation history, and special assessment plans mostly stayed off the table.
What Full Review Asks For Now
Full Review looks at the whole project. Lenders evaluate the association's operating budget, reserve funding, master insurance coverage, owner delinquency rates, pending litigation, active or planned special assessments, and structural or inspection reports. If the association cannot produce those documents, or produces them and something raises a flag, the loan does not close on your timeline.
None of this is new information for an HOA. What is new is that a mortgage now depends on it.
Is There Any Good News for Small Denver Projects?
Yes. Fannie Mae also expanded its Waiver of Project Review for projects with 10 or fewer residential units, effective March 18, 2026. In Denver Metro that covers a real slice of inventory: the small Capitol Hill and Baker conversions, the four-plex and six-plex buildings, and a lot of the newer townhome projects. If your listing sits in a project that size, put it in the remarks. It is a financing advantage now, and almost nobody is marketing it.
One more piece worth knowing. The 50 percent investor concentration limit for established projects was retired in March 2026, but no single entity may own more than 20 percent of the units in a project of 21 or more units. On Denver Metro buildings with a heavy rental mix, that single-owner cap is the number to ask about.
Why Does This Land Harder in Denver Metro?
Because attached product was already the weak spot here. Denver's July numbers put the median attached price near $380,000 with inventory stretching toward six months of supply, while single-family homes were still moving in roughly 17 days. Denverite reported condo prices down about 14 percent. You can track the segment yourself through the monthly DMAR Market Trends reports. A slower financing path on top of a segment that is already sitting pushes days on market one direction.
There is a second Colorado-specific pressure. The Colorado homeowners insurance crisis has pushed master policy premiums up across the state, and associations have passed special assessments to cover them. Under Limited Review, a buyer often found that assessment during document review. Under Full Review, the lender evaluates it before the loan is approved.
Put those two together and the Denver Metro condo problem fits in one sentence: the segment carrying the most inventory is also the segment carrying the most financing friction.
What Should Denver Agents Check Before Writing a Condo Offer?
Five Questions to Ask the HOA or Management Company
1. How many total residential units are in the project? Ten or fewer changes the review path entirely.
2. What percentage of the annual budget goes to reserves, and when was the last reserve study completed?
3. Is there an active or planned special assessment, and what is it paying for?
4. Is the association a party to any litigation?
5. What is the owner delinquency rate, and does any single entity own more than 20 percent of the units?
Five questions. Ten minutes on the phone. That is the difference between a deal that closes on time and a deal that unravels at day 25.
Order the Documents on Day One
Colorado already gives you an HOA document deadline you have to hit. Treat it as the floor, not the target. Order association documents the day you go under contract and get the status letter moving at the same time, because the lender's project review and your title work should be running in parallel, not back to back.
Part of what I do as a Sales Executive at Chicago Title Colorado is help Denver Metro agents get ahead of the items that quietly stall a closing. On attached property we can start title work and the association status letter early, so nothing waits on a document request that should have gone out three weeks earlier.
How Do You List a Denver Condo Now Without Losing Three Weeks?
Build the Financing Packet Before You Go Live
When you take the listing, ask the seller and the management company for five things: the current operating budget, the most recent reserve study, the master insurance certificate, the litigation disclosure, and any special assessment notice. Put them in one folder.
When a buyer's lender asks, you send a link instead of starting a two-week scavenger hunt. This is also a listing presentation advantage, because very few Denver Metro agents are doing it yet.
Price and Market to Buyers Who Can Actually Close
If the project has a reserve shortfall or an open assessment, conventional financing may be slow or unavailable, and your buyer pool narrows toward cash and portfolio lenders. Price for that reality and tell your seller up front rather than discovering it in week four.
Seller concessions already show up in the majority of Denver sales. On a condo with a known assessment, a structured concession that covers the assessment is often a cleaner answer than another price reduction, because it solves the specific objection instead of discounting the whole property.
Start the Title Conversation Early
Attached property carries ownership questions that detached property does not, from shared elements to declaration amendments to assessment liens that attach to the unit. If you want the plain-English version of why condo and townhome buyers in Colorado need title insurance, it is worth ten minutes before your next attached listing.
What Changes Again in January 2027?
Put one more date on the calendar. On Full Review files, the minimum reserve allocation rises from 10 percent to 15 percent of annual budgeted assessment income effective January 4, 2027. Associations barely clearing 10 percent today will need a budget change or a dues increase to stay financeable.
That gives Denver Metro agents who farm condo buildings a real reason to reach out to boards this fall. Not a pitch. A heads up that their owners' resale values depend on a budget decision most boards make in the fourth quarter.
Frequently Asked Questions
What is a non-warrantable condo in Denver in 2026?
A non-warrantable condo is a project that fails one or more of Fannie Mae's eligibility requirements, which makes it ineligible for a conventional conforming loan. Common failure points in Denver Metro are underfunded reserves, an unresolved special assessment, pending litigation, and single-entity ownership above 20 percent in projects of 21 or more units. Buyers can still purchase with cash or a portfolio loan, usually at a higher rate.
Does the August 3 change apply to FHA and VA condo loans?
No. Fannie Mae's lender letter governs conventional conforming loans. FHA and VA run their own separate condo project approval processes with their own requirements and approval lists. A Denver Metro project can be FHA approved and still fail conventional Full Review, or the reverse, so confirm both with the lender instead of assuming.
How long does a Full Review add to a Denver condo closing?
There is no fixed number, because the timeline depends almost entirely on how quickly the association or management company returns documents. Projects with an organized manager and a current reserve study move fast. Self-managed projects and boards that have to dig for records are where deals slip. That is why ordering documents on day one matters more than it used to.
Can a Colorado condo buyer still get a loan if the HOA has a special assessment?
Often yes, but it depends on what the assessment is for and how it is being funded. Lenders look at whether the assessment relates to structural safety or deferred maintenance and how it affects the borrower. Get the assessment notice and the relevant board minutes early so the lender can evaluate it rather than react to it late in the file.
Are small Denver condo projects easier to finance now?
In many cases, yes. Fannie Mae expanded its Waiver of Project Review for projects with 10 or fewer residential units, which removes most project-level review for that group. That is a meaningful advantage for small Denver Metro conversions and townhome projects, and it is worth calling out in your MLS remarks and your marketing.
If you want the five-question HOA script and the condo listing document checklist, reach out and I will send both. I build tools like this for Denver Metro and Colorado real estate agents, and I teach classes on marketing, AI, and business growth across the Front Range. Everything lives at milehightitleguy.com, and I am always happy to talk through a specific building before you write the offer.
Jerad Larkin
Sales Executive | Chicago Title Colorado
milehightitleguy.com
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