As of August 3, Fannie Mae and Freddie Mac eliminated the streamlined review process that most condo loans used to sail through on. Nearly every condo transaction now requires a Full Review, which means the lender isn't just underwriting the buyer anymore. They're underwriting the building. If a condo is part of your divorce, whether you're selling one or buying one on the other side, this change is worth understanding before it becomes a problem in escrow.
What a Full Review Actually Checks
Under a Full Review, the lender digs into the HOA's reserve funds, insurance coverage, deferred maintenance, special assessments, and owner-occupancy ratio before approving a loan. If the building doesn't hold up, the loan can't be sold to Fannie Mae or Freddie Mac, and it becomes what's called a non-warrantable condo. Financing is still possible through a portfolio lender, but usually at a higher rate and with a bigger down payment, which changes the math for anyone counting on a clean, timely close.
If You're Selling a Condo as Part of Your Divorce
A condo that was easy to finance a year ago might not clear underwriting today, especially if the association has underfunded reserves or deferred maintenance sitting on the books. Fewer buyers will qualify for conventional financing, which shrinks the buyer pool and can slow down or derail a sale that both spouses are counting on to close cleanly.
Here's where this tends to go wrong. Many agents still list a condo the way they always have: put it on the market, wait for an offer, and deal with the HOA paperwork once the lender asks for it. That habit carried less risk under the old streamlined review, since the building itself didn't get much scrutiny. Full Review closes that gap. If the reserve study, budget, insurance certificate, and litigation history aren't pulled and reviewed before the property goes live, nobody finds out there's a problem until a buyer is well into escrow and the lender comes back with a denial. At that point you've lost time, lost the buyer, and in a divorce case, lost whatever goodwill was left between the parties, not to mention equity that matters a great deal when it needs to be divided.
I pull the HOA's financials, reserve study, and insurance documents before a condo ever hits the market, not after an offer comes in, and I work with a small group of preferred lenders who already know how to underwrite Full Review condos correctly. If a building is going to be a problem, I'd rather flag it upfront and adjust pricing or timeline strategy than let a canceled escrow do it for us. For a divorce case specifically, a blown escrow isn't just a delay. It's a renegotiation, more legal fees, and more time both spouses stay financially tied to each other, which is the opposite of what everyone is trying to accomplish.
If You're Buying After Divorce
If you're rebuilding your housing situation post-divorce, often on a single income for the first time, a condo can be an appealing way to make the budget work. That's exactly the kind of purchase this change affects most. If you land on a building that doesn't pass Full Review, your financing options narrow and the numbers can shift fast. Timeline matters here too. Full Review takes longer than the old process did, and if your settlement has a deadline attached to when you need to be out of the marital home, that timeline needs to account for a slower close.
One More Thing Coming
There's a second wave coming in January 2027, when reserve funding requirements jump from 10 percent to 15 percent of an association's budget. Buildings that aren't prepared may face special assessments to catch up, which is one more reason not to assume a condo is automatically the easy, affordable option in a settlement.
Don't Let This Surprise You Mid-Escrow
None of this means a condo is off the table. It means the due diligence has to happen earlier than it used to, and before terms are locked into your settlement. If you have a condo in the mix, whether you're selling it or looking to buy one, I'm happy to run the building through a quick check before it becomes a problem later.
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Hannah Ohman is a licensed California real estate professional and a neutral resource during your divorce. While she has a legal background, she does not practice law, provide legal advice, or represent either spouse as an attorney, and nothing in this article should be relied upon as legal or financial advice. Please consult a licensed family law attorney or mortgage professional for guidance specific to your situation.