Condos · 5 min read
How do HOA budgets and reserves affect a condo loan?
June 30, 2026 · Written by Bill Egan, NMLS 7342
Short answer
The association has to show it can take care of the building without surprising you with a big bill the week after closing. Underwriters read the budget, the insurance, the questionnaire, and a reserve study if one exists. Thin reserves and an old roof are a building problem, not a credit-score problem.
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Why this comes up
The dues look high, someone mentioned a special assessment, or the agent said the HOA is “healthy” and you cannot tell if that is a feeling or a number. You reached out because a surprise bill after closing would wreck the payment you thought you had.
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Where this goes wrong
The questionnaire arrives a week before closing with thin reserves, an old roof, and an assessment “being discussed.” Underwriting suspends the file. The lock is burning. The seller will not extend. That is an HOA problem wearing a borrower-delay costume.
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What we do about it
We read the budget, the insurance, and the questionnaire the way an underwriter will. Thin reserves and an old roof are a building problem. We will not paper over them with a larger down payment and hope the investor misses it.
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How to get ready
Get the management company moving the day the contract is signed. Ask about owner-occupancy, unpaid dues, lawsuits, short-term rental rules, and whether one person owns too many units. If an assessment has already passed, disclose it. Hiding one that is being talked about does not make it go away.