---
title: "Condo Loans in Massachusetts: What Lenders Check About the Building (2026)"
description: Buying a condo means getting the building approved too. Here is what lenders check, what changed in 2026, and what to ask before you make an offer.
image: https://45730973.fs1.hubspotusercontent-na1.net/hubfs/45730973/Boston_Brownstones_HubSpot_Blog_1200x630.jpg
---

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# Condo Loans in Massachusetts: What Lenders Check About the Building (2026)

 October 27, 2026  Nate Moghadam

Here is something that surprises a lot of condo buyers: when you apply for a mortgage on a condo, the lender does not only approve you. It also approves the building. You can have strong credit, solid income and a healthy down payment, and still run into trouble because of how the condo association is run. In Massachusetts, where a condo is often the most affordable way into the market, that matters.

The rules for reviewing buildings also changed in 2026. This post covers what lenders look at, what is different now, how FHA and conventional loans treat condos, and what to check before you make an offer. It reflects guidelines as of October 2026.

## Why Lenders Review the Building

When you buy a house, the lender mostly cares about you and the property. When you buy a condo, you also depend on the association: the board, the budget, the insurance and the building's physical condition. If a lot of owners stop paying fees, or the association has no money set aside for a roof or a boiler, the building's finances can fall apart, and the value of every unit goes with it. That is a risk to the lender as well as to you.

In Massachusetts there is another reason. State law lets a condo association place a lien on a unit for unpaid fees, and a properly filed lien can take priority over the first mortgage for up to six months of unpaid fees. Lenders pay close attention to buildings where many owners are behind on dues. It is also why a clean 6(d) certificate, covered below, is a standard part of a Massachusetts condo sale.

## What Conventional Lenders Check

Most conventional loans are sold to Fannie Mae or Freddie Mac, so lenders follow their building standards. Here is a plain English summary of the main ones. Individual lenders can add their own stricter rules, so a building that passes with one lender may be turned down by another.

| What the lender looks at | What it means for you |
| --- | --- |
| **Delinquent dues** | No more than 15% of units can be 60 or more days behind on condo fees. Too many unpaid fees is a red flag for the whole building. |
| **Reserves** | The budget has to set aside at least 10% for repairs and replacements. This goes up to 15% for applications dated on or after January 4, 2027. |
| **Insurance** | The association needs proper coverage, and the deductible per unit is capped at $50,000 for applications dated on or after July 1, 2026. If a per unit deductible applies, you need your own unit owners policy. |
| **Critical repairs** | A building that needs repairs affecting safety, structure or habitability can be ineligible until the work is finished. |
| **Litigation** | Pending lawsuits about safety, structure or habitability can disqualify the building. Minor matters may be fine. |
| **Ownership and use** | Limits apply to how many units one entity can own and how much of the building is commercial space. Hotel style or split ownership arrangements are not eligible. |
| **"Unavailable" status** | Fannie Mae flags buildings it will not buy loans in. If your building is flagged, a conventional loan is not possible until it is cleared. |

## What Changed in 2026

In March 2026, Fannie Mae issued Lender Letter LL-2026-03, which changed several condo rules. Freddie Mac announced similar updates. The ones that matter most to buyers:

- **Limited Review is gone.** This was a lighter review lenders used for many established buildings. For applications dated on or after August 3, 2026, buildings need a Full Review, or a waiver where one applies. That means more paperwork from the association and sometimes more time.
- **The reserve minimum is going up.** It rises from 10 percent to 15 percent of the annual budget for applications dated on or after January 4, 2027. Buildings that have been underfunding reserves will feel this first.
- **Reserve studies must use the highest recommended funding.** A building that relies on a reserve study can no longer use the "baseline" funding method, for applications dated on or after August 3, 2026.
- **The 50 percent investor limit is gone.** The cap on how many units in an established building can be investor owned was retired in March, which helps buildings with many rentals.
- **Small buildings got easier.** A waiver of project review now covers projects with ten or fewer units in more cases, though buildings with five to ten units cannot be part of a larger development or master association.

Critical repairs deserve a closer look. Under Fannie Mae's guidance, a building can be ineligible if it failed a municipal inspection or has a significant unfunded repair that needs to be done within the next 12 months. A special assessment does not fix that problem unless the repair is completed.

## FHA Loans and Condos

FHA works differently. To use an FHA loan on a condo, the building generally has to be on HUD's list of FHA approved condominiums. If it is not, there is a second route called Single Unit Approval, which lets one unit be approved even though the building is not. For that route, the building must be complete, have at least five units, and meet a subset of FHA's requirements, including how many units are already FHA insured, owner occupancy, and the building's financial condition.

FHA also looks at reserves, which are generally expected to be at least 10 percent of assessments, along with insurance, litigation and the condition of the property. Building approvals have to be renewed periodically, so a condo that was approved a few years ago may no longer be on the list. If you are weighing FHA against conventional for a condo, I compare them in [FHA vs. conventional in Massachusetts](https://nateloans.com/blog/fha-vs-conventional-massachusetts-2026).

## Massachusetts Specifics: The 6(d) Certificate and Condo Fees

Every Massachusetts condo sale involves a **6(d) certificate**. It is a document signed by the condo trustees that confirms whether the unit owes any unpaid condo fees. Lenders and closing attorneys want a clean one, meaning no unpaid fees. If the certificate shows a balance, it has to be cleared before closing.

Condo fees also affect how much you can borrow. The monthly fee is counted as part of your housing payment when a lender looks at your debt to income ratio, so a high fee can shrink your budget even if the price looks affordable. For a look at how that works, see [how much you need to make to buy a house in Massachusetts](https://nateloans.com/blog/how-much-do-you-need-to-make-to-buy-a-house-in-massachusetts).

## What to Do Before You Make an Offer

- **Ask your lender to check the building early.** A pre-approval covers you, not the building. Problems with the building are one reason deals fall apart after pre-approval, and I cover others in [why buyers get denied after pre-approval](https://nateloans.com/blog/why-buyers-get-denied-after-pre-approval).
- **Ask for the association documents.** That usually means the budget, the most recent financial statements, any reserve study, meeting minutes, and the master insurance certificate. Minutes can show planned special assessments or repair problems.
- **Ask about special assessments and big repairs.** A roof, siding or boiler project can mean a large bill, and it can also make the building harder to finance.
- **Check FHA status if you plan to use FHA.** Ask whether the building is on HUD's approved list before you fall in love with a unit.
- **Look at the condo fee, not just the price.** Two units with the same price can have very different monthly costs.
- **Have a financing plan B.** If one loan type does not work for the building, another might.

If you are looking for help with a down payment, I cover one of the state's programs in [MassHousing down payment assistance](https://nateloans.com/blog/masshousing-down-payment-assistance-massachusetts-2026). And if you are comparing lenders, my list of [12 questions to ask a mortgage lender](https://nateloans.com/blog/questions-to-ask-a-mortgage-lender) includes how they handle condo reviews.

**Looking at a condo and not sure it will finance?** [Book a free 15 minute call](https://calendly.com/natemoghadam/homebuyer-consultation) or [get a free rate quote](https://nateloans.com/rate-quote), and send me the building address. I can tell you what to look for before you make an offer.

## Frequently Asked Questions

**Can I get a mortgage on any condo?**  
No. The building has to meet the lender's standards as well as you, and those depend on the loan type. A condo that works for one loan program may not work for another.

**What is a 6(d) certificate in Massachusetts?**  
It is a certificate signed by the condo trustees, required in a Massachusetts condo sale, that states whether the unit has unpaid condo fees. Lenders and closing attorneys want it to be clean.

**Why would a condo be denied when my loan was approved?**  
A pre-approval looks at your finances. The building review looks at the association's finances and the condition of the property. Problems such as too many unpaid dues, low reserves, major repairs needed or pending litigation can make a building ineligible even when you qualify.

**Do condo fees count against how much I can borrow?**  
Yes. The monthly fee is part of your housing payment when a lender calculates your debt to income ratio, so higher fees can lower the loan amount you qualify for.

**Is FHA or conventional better for a condo?**  
It depends on the building and on you. FHA generally requires the building to be on HUD's approved list or to qualify for single unit approval. Conventional loans require the building to meet Fannie Mae or Freddie Mac standards. The best approach is to have your lender check the building early.

## The Bottom Line

Buying a condo means getting approved along with the building. Delinquent dues, thin reserves, major repairs and lawsuits can all make a building hard to finance, and the 2026 rule changes make the review stricter in some ways and easier in others. The simplest way to avoid surprises is to ask for the association documents and have your lender look at the building before you go under contract, not after.

---

Nate Moghadam | NMLS #906770 | Fairway Independent Mortgage Corporation | Company NMLS #2289 | Equal Housing Lender. This is general information, not a rate quote, legal advice or a commitment to lend. Guidelines vary by lender and loan program and are subject to change without notice. All loans subject to credit and property approval. [Legal Disclosures](https://www.fairway.com/legal/legal-disclosures)

Topics: [First-Time Homebuyers](https://nateloans.com/blog/tag/first-time-homebuyers) [FHA Loans](https://nateloans.com/blog/tag/fha-loans) [Conventional Loans](https://nateloans.com/blog/tag/conventional-loans) [Massachusetts Real Estate](https://nateloans.com/blog/tag/massachusetts-real-estate) [Condo Financing](https://nateloans.com/blog/tag/condo-financing) [2026](https://nateloans.com/blog/tag/2026)

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