If you plan to sell a San Diego condo in 2027, I would look at the association’s next budget before setting the listing date. A buyer can qualify for the payment and still run into financing trouble because of the building. Finding that out after you accept an offer can change your timeline, your negotiating position and what you ultimately take home.
Fannie Mae has announced a higher replacement-reserve budget allocation for certain condo loans beginning January 4, 2027. For a seller, the practical question is whether your association’s finances support the financing your likely buyers will use, and what needs attention before the property goes on the market.
What changes, and which sales does it affect?
For loan applications dated on or after January 4, 2027, Fannie Mae’s Full Review requirements increase the minimum replacement-reserve allocation from 10% to 15% of annual budgeted assessment income. The controlling date is the loan-application date—not the date you list your condo.
This is a lender requirement for the applicable Fannie Mae review. It is not a California law ordering every association to raise dues by 15%.
Fannie Mae has also retired its Limited Review for established condo projects for loan applications dated on or after August 3, 2026. A project that once qualified for that lighter review now goes through Full Review unless the specific loan is eligible for Fannie Mae’s Waiver of Project Review—so the 15% requirement will reach more condo sales than it would have under the old review structure.
Fannie Mae also permits a reserve-study alternative when its conditions are met. That is more than having a study on file: the lender must evaluate the study, actual reserve funding and the budget. The budget must use the highest recommended reserve allocation in the study. A baseline-funding approach that merely aims to keep the reserve balance from falling below zero cannot be used to waive the budget-allocation requirement.
The changes are described in Fannie Mae’s March 18, 2026 lender letter and its Full Review guidance.
Other loan programs have their own requirements, and some qualifying projects have a different Fannie Mae review path. Ask the lender which rules apply to the actual transaction. One reserve percentage does not establish that an entire complex is approved or unavailable for every kind of financing.
Put the reserve percentage into dollars
Suppose an association has $900,000 in annual budgeted assessment income for this calculation:
| Annual reserve allocation | Amount |
|---|---|
| 10% of $900,000 | $90,000 |
| 15% of $900,000 | $135,000 |
| Difference | $45,000 per year |
That example holds assessment income constant so you can see the change in the allocation. It does not tell you the association’s required dues increase. The adopted budget, operating expenses, existing reserve contribution, study recommendations and allocation of charges among owners determine what an actual proposal would mean for your unit.
For a seller, I would want the association’s real figures rather than a percentage quoted without context. Is its reserve contribution already at the new level? Has the board adopted a change? Is there a study-based approach for the lender to evaluate? Those answers are more useful than assuming every owner will face the same increase.
Keep Fannie Mae and California AB 2050 separate
California’s AB 2050 is a separate state-law change. Its new reserve-funding provisions become operative January 1, 2032. Fannie Mae’s higher Full Review allocation applies to the specified loan applications beginning January 4, 2027.
Those are different rules, dates and decision-makers. A board’s plan for meeting California’s future requirements does not, by itself, establish eligibility for a buyer’s Fannie Mae loan in 2027. Likewise, the Fannie Mae allocation is not the formula for every association’s obligations under AB 2050.
My San Diego guide to California’s AB 2050 reserve law explains the state-law timeline. When planning a sale, keep the association’s legal and budget planning alongside—not in place of—the lender’s transaction-specific review.
A reserve contribution is different from “percent funded”
A reserve contribution is the amount the budget sets aside during the year. “Percent funded” compares the reserves held with a funding benchmark for the association’s components. They answer different questions.
An association can increase its annual contribution and still have a shortfall built up over earlier years. Buyers may be weighing both the monthly cost of ownership and the possibility of a future bill.
I want to understand what the board has adopted, what owners will pay and what work the money is intended to cover. Those details belong in a pricing and marketing discussion, not just a document package delivered after an offer is accepted.
In Sara McGiff’s Daily Mail feature on California HOA fee increases, I discussed the pressure association costs can put on owners. For a seller, the response is to understand the building’s actual position and prepare a strategy around it.
What I would establish before listing
Gather the adopted budget, current reserve study, recent financial statements, insurance information and notices of approved or proposed assessments. If next year’s budget is still a proposal, label it as a proposal and find out when the board expects to decide.
I would organize the preparation around three questions:
What will a buyer pay?
Identify current dues, adopted increases and any additional assessment, including payment dates and what the charge covers. Keep adopted amounts separate from proposals. A buyer needs a clear picture of the current obligation and the decisions still ahead.
What could affect the transaction?
Ask the lender which project-review route applies and which documents it will need. I can coordinate the sale and help identify unanswered questions; the lender makes the financing decision.
What can we resolve before marketing?
An outdated document, an unanswered records request and an unfunded repair are different problems. Replacing a missing document may answer a question quickly. A funding or property-condition issue needs its own substantive answer. More paperwork alone does not resolve it.
My condo HOA due-diligence checklist gives you a useful starting point for organizing the records.
Should you sell before January?
I would not make that decision from the calendar alone. If the association’s funding already supports the applicable requirements, rushing a sale may not improve your position. A credible, adopted funding plan may also give buyers and lenders better information than an unresolved proposal.
Conversely, listing before January does not make an underlying problem disappear or guarantee that a buyer’s loan application will fall under earlier requirements. The listing date is not the rule’s trigger.
Compare your moving plans, competing properties, estimated proceeds and the association’s decision timeline. That is the basis for choosing when to sell—not a blanket instruction that every condo owner should move before a deadline.
Protect the offer you accept
Before treating a financed offer as ready to close, establish when the lender expects to complete its project review, which documents remain outstanding and whether the contingency dates allow the work to be done.
A buyer’s preapproval is not an answer to every building question. My condo mortgage and project-approval guide explains that distinction and the issues a lender may need to resolve.
My job is to help you price and market the property accurately, address questions early and negotiate terms that fit your plans. We should be able to explain the condo’s strengths and costs without promising a financing outcome that belongs to the lender.
Questions sellers ask
Does this automatically reduce my condo’s value?
No. I would evaluate your association, available financing and comparable sales before recommending a price. A change affecting some transactions is not a fixed deduction from every condo’s value.
Can I solve a project issue by offering the buyer a credit?
A permitted credit can help with certain buyer costs. It does not substitute for the lender’s project requirements or complete work the association still needs to perform.
What should I bring to an initial sale discussion?
Your address, expected selling timeline, current dues, any assessment notices and the HOA records you already have. From there, we can identify the missing information and build the pricing and preparation plan.