Condos

The sector at a glance

Condominium real estate is the for-sale side of attached, commonly-owned housing: a buyer takes fee title to the air space inside a unit plus an undivided interest in the common elements, and inherits a mandatory association, a shared budget, a master insurance policy and a governing document stack. In Austin that means downtown and near-downtown high-rise towers, Rainey Street and Seaholm district projects, mid-rise and condo-regime conversions in the urban core, and a resale market that trades building by building rather than neighborhood by neighborhood. What makes the category genuinely different from single-family is not the architecture, it is the financing: the loan is underwritten against the project as well as the borrower, so a building's investor mix, delinquency rate, reserve funding, commercial square footage, litigation and deferred maintenance can make an otherwise qualified buyer unfinanceable. Buyers are downtown professionals, downsizers, second-home and lock-and-leave owners and investors; the people who actually decide the deal are the lender's condo project reviewer, the HOA that produces the questionnaire and resale certificate, and the insurance carrier that prices the master policy.

Topic guides

Concepts

Warrantable condo

A project that meets Fannie Mae or Freddie Mac eligibility, so a unit in it can be financed with a conventional conforming loan at standard rates. Warrantability is a property of the building, not the buyer — the same borrower can be approved in one tower and declined across the street.

Non-warrantable condo

A project that fails one or more agency tests — too many investors, too much commercial space, active litigation, thin reserves, high delinquency, hotel-like operation. Units still sell, but through portfolio, non-QM or cash buyers, usually at a higher rate and a larger down payment, which narrows the resale pool.

Fannie Mae project review (Limited vs Full)

Two levels of scrutiny. Limited Review applies to certain established projects with larger down payments and checks a short list of conditions. Full Review examines the budget, reserves, insurance, delinquency, ownership concentration and legal documents. Which one applies is driven by occupancy type, loan-to-value and whether the project is established or new.

Condo Project Manager (CPM)

Fannie Mae's web application where lenders enter project data, get a certification, and see whether a project has been flagged as unavailable. A CPM certification is the practical proof of warrantability that a listing agent can ask a lender to confirm before a building goes under contract.

PERS (Project Eligibility Review Service)

Fannie Mae's manual pre-approval process for new and newly converted projects, and for projects needing an exception. Developers of new towers pursue PERS approval so their buyers can get conventional financing at closing rather than discovering the project is unreviewable.

Investor concentration limit

The cap on the share of units that are non-owner-occupied. When investor ownership climbs past agency thresholds, new purchase loans for investment or second-home buyers are restricted — which is why a building that rents well can become harder to sell.

Single-entity ownership limit

The cap on units owned by one person or entity. One investor accumulating a block of units in a small project can push it over the limit and make the whole building non-warrantable, even though nothing about the individual unit changed.

Commercial space percentage limit

The cap on non-residential floor area in a project. Mixed-use towers with ground-floor retail, restaurants, offices or a hotel component are the ones most likely to trip it — a common outcome in downtown Austin's mixed-use podium towers.

Delinquency threshold

The share of units more than 60 days behind on assessments, generally limited to 15%. It is a direct reading of association financial health, and it is the metric most likely to move month to month, so a project can pass review in March and fail in July.

Reserve study

A professional analysis of the association's long-lived components — roof, elevators, facade, mechanical, garage — with remaining useful life and a funding plan. Lenders increasingly want to see one, and buyers should read the percent-funded figure before the amenity list.

10% reserve requirement

The agency expectation that at least 10% of the association's annual budget is allocated to replacement reserves. A budget without that line, or a reserve study showing severe underfunding, is a leading indicator of a future special assessment.

Deferred maintenance

Repairs the association has postponed. Post-Surfside, agency guidance distinguishes routine deferred maintenance from 'critical repairs' affecting safety, soundness, structural integrity or habitability — and a project with unaddressed critical repairs is ineligible until they are resolved.

Condo project questionnaire (Forms 1076 / 1077)

The standardized Fannie/Freddie forms the association or its manager completes for the lender, covering ownership mix, delinquency, insurance, litigation, reserves and — since the post-Surfside revisions — structural inspections, critical repairs and special assessments. Many deals stall simply because the management company is slow to return it.

Litigation exclusion

Pending or threatened litigation involving the association can make a project ineligible, particularly construction-defect or personal-injury claims that exceed insurance. Minor matters — a small-claims collection action against a delinquent owner — are generally carved out, but the lender decides, not the seller.

FHA condo approval

HUD's project-level approval, searchable in the HUD condominium lookup, that lets buyers use FHA financing with low down payments. Approvals expire and must be recertified, so a building can appear on the list and still be unusable if the approval has lapsed.

FHA single-unit approval

A path allowing an FHA loan on an individual unit in a project that is not itself FHA-approved, subject to limits on how many units in the building may use it plus owner-occupancy and financial conditions. Often the only low-down-payment option in a downtown tower.

Portfolio lending

A bank or credit union originating a loan it keeps on its own balance sheet rather than selling to Fannie or Freddie, so it can set its own project rules. This is the standard workaround for a non-warrantable building — usually a higher rate, a larger down payment, and a relationship requirement.

Non-QM lending

Loans outside the Qualified Mortgage framework, sold to private investors, used for non-warrantable projects, condo-hotels, foreign nationals and bank-statement borrowers. It keeps deals alive at a price, and it is the market that sets the true floor value of a unit in a failed-review building.

Short-term rental permission

Whether the declaration and the city allow nightly rental. It cuts both ways: STR-friendly buildings command investor demand and higher gross income, but hotel-like operation, mandatory rental pooling or a front-desk booking program can push a project outside conventional eligibility and shrink the financeable buyer pool.

Homeowners association (HOA)

The mandatory nonprofit corporation every condominium owner belongs to, governed by an elected board, funded by assessments, and empowered to maintain common elements, enforce rules and place a lien for unpaid dues. In a condo it is not optional and cannot be resigned from.

Master vs sub association

In multi-building or mixed-use developments, a master association covers shared land, garages or amenities while each building's sub-association handles its own. Owners pay both, and lenders review both — a clean sub-association can still be dragged down by a troubled master.

Declaration / CC&Rs

The recorded document that creates the condominium regime, defines each unit's boundaries and undivided interest, designates common and limited common elements, and sets the covenants, conditions and restrictions that run with the land. It outranks the bylaws and the rules.

Bylaws

The association's operating rules — board size and elections, meetings, quorum, proxies, officer duties, budget adoption. Where the declaration says what the property is, the bylaws say how the community governs itself.

Resale certificate

The Texas disclosure package a seller obtains from the association for a buyer, stating current assessments, any special assessment, delinquencies, litigation, insurance, violations on the unit and required fees. It is the single most information-dense document in a condo transaction.

Condo docs delivery period

The contractual window in which the seller must deliver the resale certificate and governing documents. The clock on the buyer's review runs from delivery, and late delivery is a routine cause of extended closings.

Right of rescission

The buyer's contractual right to terminate and recover earnest money if the condominium documents are not delivered on time or if the buyer objects after reviewing them. It is the practical teeth behind the document-review period.

Special assessment

A one-time charge levied on owners for a cost the operating budget and reserves cannot absorb — facade repair, garage waterproofing, elevator modernization, an insurance shortfall. It is the risk that most distinguishes condo ownership from single-family, and it transfers with the unit unless the contract allocates it.

Reserve fund

Money set aside for major component replacement rather than day-to-day operations. Well-funded reserves smooth costs into monthly dues; thin reserves push them into lump-sum assessments at the worst possible moment.

Operating budget

The association's annual income and expense plan — management, insurance, utilities, staffing, landscaping, elevator and life-safety contracts, plus the reserve contribution. Reading two or three consecutive years shows whether dues are keeping pace with real costs.

Dues per square foot

Monthly assessment divided by unit size, the only fair way to compare buildings. A tower with concierge, valet, pool and 24-hour staff will price far above a low-amenity mid-rise, and the gap is a service level, not a markup.

Transfer fee

A charge collected at closing when a unit changes hands, covering the association's or manager's cost to update records and produce documents. Small in dollars, but it belongs in the buyer's closing-cost estimate and is frequently overlooked.

Capital contribution

A one-time payment at closing, often one to a few months of dues, deposited into the association's reserves rather than credited to the seller. It funds the community's long-term capital plan from each turnover.

Master insurance policy

The association's property and liability coverage on the building and common elements. Its form matters enormously: 'bare walls' covers structure only, 'single entity' adds original fixtures, 'all-in' extends further into the unit — and the gap defines what the owner's own policy must cover.

HO-6 walls-in policy

The unit owner's policy covering interior finishes, improvements, personal property, liability and loss of use, sized to fill the gap the master policy leaves. Lenders require it, and buyers routinely under-insure because they never read the master policy form.

Loss assessment coverage

An HO-6 endorsement that pays the owner's share of a covered association loss or deductible assessed back to unit owners. Limits are often left at a token amount when the association's deductible could allocate far more per unit.

Master policy deductible allocation

The rule — in the declaration or by statute — determining who absorbs the association's deductible when a covered loss occurs. Rising deductibles, especially for wind, hail and water damage, have turned this from boilerplate into a real six-figure question for associations.

Common elements vs limited common elements

Common elements (lobby, roof, structure, corridors, garage) are shared by all owners; limited common elements (a balcony, an assigned parking space, a terrace, an HVAC condenser) are common property reserved for one or a few units. The split decides who maintains, repairs and pays for what.

Undivided interest

Each unit's fractional ownership of the common elements, fixed in the declaration and typically allocated by size or value. It drives the owner's share of assessments, insurance proceeds and voting power, and it cannot be separated from the unit.

Parking: deeded vs assigned

A deeded space is real property conveyed with (or separately from) the unit; an assigned space is a limited common element allocated by the association and can sometimes be reassigned. In downtown Austin the difference can be worth a meaningful share of the unit's value.

Air rights

The legally severable right to develop the space above a parcel. It matters to condo buyers twice: the tower they are buying into may have been built on purchased air rights, and the view they are paying for may be erased by a neighbor exercising theirs.

Mixed-use podium

The lower floors of a tower holding retail, restaurants, parking, offices or a hotel, with residences above. It is what makes downtown living walkable — and it is the most common reason a project exceeds the agency limit on commercial space.

Condo conversion

Turning an existing rental building into individually owned units by recording a condominium declaration. Converted projects get extra lender scrutiny — newly converted projects face specific agency requirements around rehabilitation, reserves and presales.

Condo regime declaration

The recorded instrument that creates the condominium under Texas Property Code Chapter 82. In Austin it is also used for detached and small-lot 'condo regime' houses, where buyers own a house but hold it as a condominium unit with an association — a structure that surprises buyers and complicates financing.

Right of first refusal

A declaration provision letting the association or its members match a third-party offer before a unit can be sold. Agency guidelines restrict rights of first refusal that impede free transferability, so an aggressive ROFR clause can itself threaten warrantability.

Rental cap

A limit in the declaration or rules on how many units may be leased at once, often with a waiting list and a minimum lease term. It protects owner-occupancy and financing eligibility, and it directly determines whether a unit works as an investment.

Pet restriction

Rules on number, size, breed and common-area conduct for animals, plus the separate legal treatment of assistance animals. A frequent source of enforcement disputes and a genuine deal-breaker for a large share of buyers.

Estoppel

A written statement from the association confirming the amounts owed on a unit as of closing — dues, assessments, fines, transfer fees. The closing figures come from it, and an error found afterward tends to become the new owner's problem.

Condo-hotel (condotel)

A project operated with hotel-like characteristics — front desk, central reservations, mandatory or optional rental pooling, daily housekeeping. Conventional agency financing generally excludes condotels, pushing buyers to non-QM or cash and defining a distinctly separate resale market.

Watch

A video primer on Condos.

▶Warrantable vs Non-Warrantable Condos Explained (What Buyers MUST Know) Gallardo Selling In The Hudson▶Warrantable vs Non Warrantable Condos what is the difference between? Amanda Charlesworth | Realtor Panama City Beach FL▶The TRUTH About Condo Loans in 2025 | Warrantable vs Non-Warrantable Explained Free Mortgage Rate▶Non Warrantable Condos What You Need to Know Michelle Oddo - The Oddo Group▶Fannie Mae Condo Loan Rules: Breaking Push to Delay FHFA Changes The Realty Brief▶2026 Condo Financing Guidelines: NEW Fannie Mae & Freddie Mac Condo Loan Rules Explained Adam Heaney▶New Fannie Mae & Freddie Mac Condo Rules: What Buyers & Sellers Need to Know Kelley Kesterson, Real Estate Specialist▶How New Condo Rules Decide If You Get Approved kathleen connerty▶Condo Financing Changes 2026: Fannie Mae & Freddie Mac Rules Every HOA Must Know Updike Pugh▶2026 Fannie Mae Condo Financing Guidelines Updated REAZ Seminars▶Massive Condo Implications Choice Mortgage Group▶New Fannie Mae Condo Reserve Rules Take Effect in 2026 Arrivva, We Fixed Real Estate▶Buying a Condo: HOA Document Review Period Erica Stout, REALTOR®▶Buying a Condo or Townhome? Why Reading HOA Documents is Critical AlexanderGroup Real Estate▶Condo Financing Explained: Full Review, Warrantable vs Non-Warrantable Condos Danielle Desousa Mortgage Broker - FL▶Warrantable vs Non-Warrantable Condo: What Every Buyer MUST Know Before Making an Offer Mortgage by Q▶New Condo Financing Rules: What Buyers & Sellers Need to Know Tamika R. Johnson, DMV Realtor▶Fannie Mae Condo Lending Changes 2026: What Buyers Must Know Before Aug 3rd | Costanza Genoese Zerbi Costanza Genoese Zerbi-Realtor-Long Beach▶Changes in Fannie Mae Condo Guidelines #shorts D&V Home Mortgage▶Understanding Condo + HOA document review contingency Liz Lord | Arlva Homes LLC ▶Do This Before Buying In A HOA Mortgage Biscuit▶Almost Lost a Client's Condo Deal Over This New Rule Jeremy Rosenthal▶5 Things To Check in HOA Documents before Buying A Home #hoa #buyingahome South Jersey Shore Relocation▶Buying a Condo/Townhome? Know your HOA Documents first! HOA Risk Insights▶Can a Condo Special Assessment Kill Your Deal? Yes — Here’s What Brevard Buyers Need to Know Carrie Liotta, Space Coast Realtor▶Condo Special Assessments: What You NEED to Know! #shorts Keys & Gears | Unlocking Real Estate