By Josh McKnight | The McKnight Team
Fannie Mae and Freddie Mac revised the rules governing condominium lending this month, and the National Association of Realtors flagged the changes on Aug. 18. Streamlined project approvals are eliminated. Buildings with ten or fewer units gain new waivers. Homeowners association reserve requirements increase across the board.
Buying a condo in Montgomery County now depends more than ever on the building rather than the borrower, and two otherwise identical buyers can get different answers in different buildings.
How the New Approval Process Works
Condo financing has always had two layers. The lender underwrites you: income, credit, assets, debt. Then the lender underwrites the building: owner occupancy ratio, reserve funding, litigation, delinquency rate, and the share of units owned by any single entity. Fail the second layer and your own approval does not matter.
The streamlined review that just disappeared allowed certain established projects to skip the full building analysis. Removing it means more buildings face the complete review. That is slower.
Pushing the other way, the Fannie Mae condo project manager application lets subsequent loans in an already approved building bypass a fresh project review. If someone financed in your building recently, your file may move quickly. If nobody has, you are the one paying for the review in time.
What Buying a Condo in Montgomery County Actually Requires Now
The reserve requirement is the change with the longest tail. Associations must hold more. Holding more means collecting more. Collecting more means higher monthly fees, special assessments, or both. That cost lands on owners, not on Fannie Mae.
Set that against what the numbers show right now. The average Conshohocken home value is $491,677, up 1.8 percent over the past year, per Zillow data through July 31, 2026. Montgomery County overall sits at $499,755, up 2.4 percent. Conshohocken is growing slower than its county, and a meaningful share of its inventory is attached and association governed.
Higher fees compress what a buyer can borrow. That is the mechanism. Not the headline, the arithmetic.
Why the Rules Changed at All
The changes did not appear from nowhere. They trace to deferred maintenance, underfunded reserves, and the surprise special assessments that follow both. Associations that collected the minimum for twenty years discovered the roof, the garage deck, and the facade all came due at once. Owners got five-figure bills with sixty days to pay.
Requiring stronger reserves is an attempt to price that risk honestly instead of letting it accumulate silently. Reasonable people land differently on whether federal loan standards are the right tool for the job.
The cost of the fix is real and it falls unevenly. A well-run association already funding reserves properly sees little change. An association that has kept fees artificially low to protect resale appeal faces a reckoning, and the owners who benefited from those low fees for a decade are not always the ones still holding the unit. Both things can be true. The old system understated the true cost of ownership, and the correction lands hardest on current owners.
If you own a condo anywhere in Montgomery County, tell your neighbor to read the next association budget carefully. The reserve line is the one that matters now.
What This Means for You
If you are buying, ask for the association budget, the reserve study, and the last two years of meeting minutes before your inspection contingency expires. Ask your lender directly whether the building is already approved through the condo project manager system, because that single answer can change your timeline by weeks. If you are selling a condo, start the association questionnaire the day you list. It is the most common cause of a delayed settlement in attached housing.
Attached inventory is not evenly distributed across this county. Conshohocken packs a walkable district and two rail stations into a small footprint, which is exactly the kind of place where condo rules decide who can buy. The current numbers on our Conshohocken PA homes for sale page will give you a sense of where that market sits.
Thinking about buying or selling in Conshohocken or Montgomery County? Let’s talk.
Frequently Asked Questions About Buying a Condo in Montgomery County
What is a non-warrantable condo?
A non-warrantable condo sits in a building that fails Fannie Mae or Freddie Mac project standards, often for reserve funding, owner occupancy, litigation, or investor concentration. Financing exists but typically requires a portfolio lender and a larger down payment.
Will the new reserve requirements raise my condo fees?
Possibly. Associations already funding reserves adequately may see no change. Those that have not will need to collect more, which arrives as higher monthly fees, a special assessment, or a combination of the two.
Should I still buy a condo under the new rules?
Condos remain the most accessible entry point in much of this county. The change is not a reason to avoid them. It is a reason to underwrite the association as carefully as you underwrite the unit.
How long does condo project approval take now?
It depends entirely on whether the building has been reviewed recently. An already approved project using the Fannie Mae condo project manager can move in days. A building requiring full review can add several weeks.
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