The big interview: What brokers need to know before January’s condo deadline
“The reserve requirement for the HOA goes from 10% to 15%,” he said. “So we’re talking about a 50% increase on the reserve allocation. If these HOAs are not reserving for the adequate amount, those projects are not going to qualify for agency financing.”
That reserve increase takes effect January 4, 2027, and Davis said the impact will be heavy in Florida, where associations are already stretched by post-Surfside inspection and reserve mandates.
“Especially in the state of Florida, there’s already work that needs to be done to some of these condos,” he said. “They’ve had to reserve for that, and now you need a higher reserve on top of it. I think a lot of HOAs are not going to have that 15%, and that’s going to kick a lot of these projects out.”
How brokers should prepare
While the process of financing condos is a little different between agency and non-agency, Davis said some of the changes that brokers will notice are actually easier in the non-agency space.
“For a lot of the non-QM investors, we have a different questionnaire. It’s not as in-depth as the agencies,” he said. “I think it’s an easier process to go non-agency for the brokers.”
