Condominium loans.
The basics
Condo financing splits into two very different problems, borrowing against individual units you own and borrowing against a project as a whole, and lenders treat them nothing alike.
Condominium financing confuses people because the word covers two things that share almost nothing. There is the loan against units, where you own real estate inside a project governed by somebody else. And there is the loan against a project, where you own the building or a controlling share of it. The collateral, the risk, and the lender list are different in each case.
If you own units, your loan is only partly about your units. It is mostly about the association. The lender is taking collateral that depends on a third party to insure the roof, maintain the common elements, collect from every other owner, and stay solvent. That is why condo underwriting spends so much time on documents that have nothing to do with your unit numbers.
What lenders read in the association
The budget, the reserve study, the delinquency rate, the master insurance policy, and the litigation history. Those five items decide more condo files than the rent roll does.
An association with funded reserves, low delinquencies, current insurance, and no active defect litigation is easy to lend into. One that is deferring maintenance, running assessments to cover operations, or defending a claim is not impossible, it just moves to a different kind of lender, usually one that underwrites the deal by hand rather than against a checklist.
The other item that gets missed is the leasing rules. Plenty of associations cap the number of units that can be rented, impose minimum lease terms, or require board approval of tenants. If you are buying units as rentals, those rules define your income, and a lender will read them.
Owning the project, not just units in it
Project-level condo deals are their own animal. You might be holding a building that was mapped as condominium but never sold off, or acquiring the remaining inventory, or planning a sell-out over several years.
Here the underwriting shifts toward absorption. How fast do units sell in that market, at what price, and what carrying costs run while they do. Lenders want release provisions written so that units can be conveyed cleanly as they close, and they want the release pricing to keep the remaining collateral sound. Getting that structure right at the start saves a great deal of friction later.
Getting a straight answer on your project
Condo deals get declined for reasons that have nothing to do with the borrower. We would rather tell you early which issues in your project are real obstacles and which are just paperwork.
Send us the basics, the association documents you have, and what you are trying to accomplish. We shop it and come back with what is actually available. No credit pull, no cost to start.
What lenders look at.
The things that move a condominiums file from "maybe" to a real quote.
Which side of the deal you are on
A loan on units inside a project is underwritten differently than a loan on the project itself. The first question we ask is what exactly you own, because it changes the entire lender list.
Association financial health
Lenders review the HOA budget, the reserve study, and the assessment history. An association running thin on reserves or facing a large special assessment narrows the options quickly.
Owner-occupancy and investor concentration
Many lenders track how much of a project is owner-occupied versus rented, and how much is held by any single owner. Heavy investor concentration pushes a file toward a smaller set of lenders.
Litigation and insurance status
Pending construction defect litigation or a lapse in the master policy will stop most conventional lenders. Not all, but enough that it needs to be disclosed early.
Rentability and HOA rules
If the association restricts leasing, caps rentals, or imposes minimum lease terms, that limits the income a lender can underwrite. The declaration and bylaws matter as much as the rent roll.
How these deals are usually structured.
Every lender prices differently and every file is its own case. Treat this as the shape of a typical condominiums deal, not a quote.
- Loan amount
- Generally $500,000 and up, whether that is a block of units or a whole project.
- Common capital sources
- Banks, credit unions, and private money, with CMBS appearing on larger project-level deals. Lenders that underwrite associations by hand handle most of the harder files.
- Typical purposes
- Purchase, refinance, cash-out refinance, portfolio consolidation of scattered units, and conversion or repositioning plays.
- Rate structure
- Fixed and floating both exist. Project-level deals and unit-level portfolios often price and structure differently from each other.
- Timeline
- A soft LOI quote often within 24 to 48 hours once your scenario matches a lender's guidelines, and a hard LOI in one to two weeks.
Terms depend on the property, the sponsor, and the lender. Nothing here is a commitment to lend.
Other multifamily we finance.
Different property, same process.
Or see everything under multifamily.
Loan types we place on condominiums.
Condominiums questions.
Still have a question about condominiums? Start a request and our team will get you an answer.
Often yes. A blanket loan across multiple units in the same project is a common structure, and it is usually cleaner than carrying separate loans on each unit. What matters is the project itself and how concentrated your ownership is within it.
Some lending programs require the condo project to meet a set of conditions covering reserves, insurance, litigation, delinquencies, and owner-occupancy before they will lend on units inside it. Other capital sources do not run that process at all. Part of our job is knowing which path your project can actually clear.
Not automatically. It does need to be disclosed, and lenders will want to understand the size, the purpose, and who is responsible for it. Deals with known assessments get placed regularly, usually with lenders who underwrite the association closely rather than screening it out.
Yes, and that is usually a different structure, with release provisions that let you convey units as they sell. Tell us the sell-out plan up front because it drives which lenders make sense.
Frequently. Condo files get declined for association issues, investor concentration, or unusual rental rules more often than for the borrower. With more than 1,000 lender relationships, there is usually somewhere to take it. No obligation to find out.
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