New Condo Rules Could Delay Your Twin Cities Sale

If you own a condo in Minnesota, the thing most likely to sink your next sale may have nothing to do with your unit. Lenders are now looking just as hard at the association behind it as they are at your buyer.

The limited review is gone. As of August 3, 2026, Fannie Mae and Freddie Mac retired the limited condo review process. Many established projects now go through a fuller review of the association itself, not just the person buying.

Reserves face a higher bar. Then, on January 4, 2027, many full project reviews will generally expect at least 15% of annual assessment income to go toward replacement reserves. Other permitted methods can still show the reserves are adequate.

A qualified buyer isn’t enough. You can price it right, keep the place in great shape, and sign with a buyer who’s fully approved. The lender may still dig into the HOA budget, reserve funding, insurance, owner delinquencies, special assessments, major repairs, litigation, and whether the project clears the eligibility rules. Incomplete documents are enough on their own to stall or sink the loan.

Order the HOA documents before listing. The costliest mistake is waiting for an accepted offer to find the problem, and the work starts before it goes on the market. Pull the resale certificate, the current budget, insurance information, the reserve study, meeting minutes, special assessment details, and anything covering major repairs or likely litigation. Bringing those issues to light early keeps the strategy in your hands.

Thin reserves aren’t a dead end. A light reserve account doesn’t make a condo unsellable on its own, but it does mean the association’s financial health is now part of what you’re selling.

If you’re thinking about selling a condo in the Twin Cities, we’ll go through the property and the HOA documents early. We can build a game plan before a lender surprises you. Call or text me at 952-222-9000, email me at john@johnschustergroup.com, or visit johnschustergroup.com. I’d rather catch a problem now, while there’s still time to work around it.