The biggest change to condo financing in a decade took effect August 3. Some of it is very good for Richmond condos, and some of it is going to hurt. Here's the honest split — which buildings win, which get exposed, and what to do.
The biggest change to condominium financing in a decade took effect on August 3, 2026. Fannie Mae’s Lender Letter LL-2026-03 — matched by Freddie Mac’s Bulletin 2026-C — rewrote how condo buildings qualify for a conventional mortgage. Most of the coverage has been panic (“every condo now needs a full review!”). That’s half the story. The truth is that this package helps some Richmond condos and hurts others, and which side a building lands on has almost nothing to do with the unit you’re buying and almost everything to do with how the association is run.
Here’s the honest split, building type by building type, for the Richmond metro.
The rules were announced back in March and phase in on four different dates. It’s worth knowing which is which, because the trigger is your loan application date, not your closing date.
If you want the plain-English primer on what “warrantable” even means and why one failed line item can sink an entire building, start with Warrantability: the word that decides whether a condo gets financed and the deep dive on the Fannie Mae Form 1076. This post assumes you’ve got the basics.
The Waiver of Project Review used to apply only to projects of four units or fewer. It now covers buildings with up to 10 units. For those buildings, the lender skips most of the association deep-dive entirely — less paperwork, faster closings, fewer ways for a deal to die in underwriting.
This matters more in Richmond than in almost any market, because so much of our inventory is boutique conversion. Buildings like The Decatur (3 units), Westhampton on Grove (3), The Sydney (7), Mule Barn Alley (8), and Windsor Court (10) now sit inside that waiver. A year ago a slow, self-managed board could stall a sale in one of these; now the review largely gets out of the way.
One catch worth knowing: for buildings of 5–10 units, the waiver only applies if the project isn’t part of a larger master association or multi-phase development. A boutique building standing on its own qualifies; the same size building inside a master-planned community does not. And note the cliff — an 11-unit building like Gotham or The Belfry sits just over the line and still faces full review.
This is the quietest change and maybe the most important one for Richmond. For years, a building could be knocked out of conventional financing if more than 50% of its units were investor-owned. That rule is gone for established projects.
Think about where that bit hardest here: the buildings clustered around VCU and downtown, where investors and student-rental owners naturally concentrate — the condos near the Monroe Park and MCV campuses, the W. Broad corridor, the downtown high-rises. A financially healthy building near VCU that happened to tip past 50% rentals could effectively lose its buyer pool overnight. Now, as long as the association’s finances, reserves, and insurance check out, a high rental share alone no longer triggers an automatic denial. For the rental-tilted parts of the Richmond condo market, that’s a direct expansion of who can buy.
Two cautions. First, don’t confuse this with the separate presale rule (at least 50% of a new project must go to owner-occupants) — that one still stands. Second, individual lenders can still keep their own stricter overlays, so confirm your lender actually follows the new agency guidance before you lean on it.
Roofs no longer have to be insured at full replacement cost — an association can carry cheaper actual-cash-value coverage on the roof specifically. In a market where condo insurance premiums have been climbing hard, that’s a small but real pressure valve for boards trying to hold dues down. (The rest of the master policy still has to settle at replacement cost — the roof is a carve-out, not a green light to cheap-out the whole building.)
Limited Review let a buyer with a solid down payment close on an established condo without the lender dissecting the whole association. Nationally it accounted for roughly 40% of all condo reviews. As of August 3, for any application in a building of 11+ units, it’s gone. Every one of those purchases now runs through Full Review: reserves, delinquencies, litigation, insurance, the works — every single time.
For Richmond’s mid-size and larger conversions — The Prestwould (56 units), Ginter Place (69), Hathaway Tower (143), 5100 Monument (184), Regency Woods (300) — that means longer closings and a hard dependency on the HOA or its management company turning around a complete document package quickly. The building itself may be perfectly warrantable; the risk now is a slow or disorganized board turning a clean deal into a blown escrow. Plan for an extra two to four weeks and get the condo questionnaire moving at pre-approval, not after the appraisal.
Two of the changes squeeze the same weak point: from August 3, if a lender uses a reserve study, it must follow the study’s highest recommended funding level (baseline funding is out); and from January 2027, the minimum reserve contribution rises to 15% of budgeted assessment income. Plenty of associations have been sitting right at the old 10% floor.
The buildings most exposed here are the older, self-managed Richmond conversions that have historically kept dues low by keeping reserves lean. If a board can’t show adequate reserves — or a current study (within 36 months) backing up its funding — units in that building can slide into non-warrantable territory, which means conventional financing dries up and sellers are left with cash buyers and lower prices. The flip side is that dues are likely going up across a lot of associations as boards move to comply, which feeds straight into affordability and monthly cost. (If you’ve ever wondered whether high dues actually hurt a condo’s value, the answer is nuanced — see Do high dues kill a condo’s value?.)
A master policy’s per-unit deductible is now capped at $50,000. If a building carries a high deductible to keep its premium down, individual buyers will be required to carry a personal HO-6 policy large enough to bridge that gap. It’s manageable, but it’s one more box that has to be checked before a condo loan clears — and one more place a rushed file can stall.
Strip away the mechanics and here’s what August 3 really did. A condo’s financeability — and therefore its price and how fast it sells — is now tied less to square footage, finishes, and location, and more to how well the association is run. Well-managed buildings with funded reserves, current studies, and organized paperwork will sail through Full Review, attract every buyer, and hold their values. Underfunded, disorganized, or slow-to-respond buildings will see deals fall apart, buyer pools shrink to cash, and prices soften.
For a market like ours — heavy on historic conversions and small self-managed associations — that’s a genuine dividing line. The good news is that it rewards exactly the buildings that were already doing it right, and it’s fixable for the ones that weren’t.
If you’re buying: before you fall for a unit, ask for three documents — the current budget (is the reserve line at or heading toward 15%?), the reserve study (dated within 36 months, and which funding level?), and the master insurance policy (replacement cost, deductible under $50K). In a small building, ask whether it qualifies for the review waiver. And apply early — the application date is what locks in which rules you’re under.
If you own in a Richmond condo, or sit on a board: the associations that get ahead of this protect every owner’s equity. Audit your reserve percentage, get your study current, review your master deductible before renewal, and keep a clean, digital document package ready to hand a lender on demand. The buildings that do this become the ones agents and buyers gravitate toward.
If you want to know where a specific Richmond building stands — its size, its regime, its history, and whether these changes help it or expose it — that’s exactly what this catalog is for. Browse the buildings, or reach out and we’ll walk through your building’s situation directly.
This article is general information, not legal, financial, or lending advice. Reserve requirements, insurance rules, and individual lender overlays vary; confirm your building’s specifics with your lender and, where appropriate, the association’s attorney or a qualified reserve professional. Sources: Fannie Mae Lender Letter LL-2026-03; Freddie Mac Bulletin 2026-C; Community Associations Institute.
