Hey {{first_name}},

There's a mortgage rule change moving through Lake County right now that most condo owners and buyers haven't heard a word about. It won't make the evening news. It's not dramatic. But it's already reshaping which condos a bank will lend on, what association dues might look like next year, and — if you know where to look — where the actual deals are hiding.

Fair warning: the first part of this issue gets a little technical, because the changes themselves are technical. Stick with me — there's a plain-English version halfway down, and a real list of opportunities waiting after that. (I break down stuff like this on video too, over on my YouTube channel, if that's more your speed.)

If you don't own or want a condo, this one's still worth reading. You probably know someone who does, and this is the kind of thing that's much easier to hear about now than during underwriting, three weeks before a closing.

In March 2026, Fannie Mae and Freddie Mac — the two agencies that buy most conventional mortgages from banks, which is what lets banks keep lending — issued matching new rulebooks for how they evaluate condo buildings before backing a loan inside them. A few pieces matter most:

Reserves are going up. The minimum a condo association has to keep in its reserve fund is rising from 10% to 15% of its annual budget, for loan applications dated January 4, 2027 and after. Associations with a current reserve study can instead fund to whatever that study recommends.

The shortcut is gone. Starting August 3, 2026, the "Limited Review" process — a faster, lighter-touch approval some condo loans used to qualify for — is being eliminated almost entirely. Nearly every condo purchase now gets a Full Review: budget, insurance, delinquency rate, reserve study, meeting minutes, all of it.

One rule actually got easier. The old cap on how many units in a building could be investor-owned before it counted against the building was dropped in March. A building that was previously unfinanceable purely because too many units were rented out may qualify for a normal loan again — worth revisiting if you got turned away on that basis before.

On the insurance side, associations can now choose "actual cash value" coverage on roofs instead of being required to carry full replacement-cost coverage — aimed at lowering premiums, with the tradeoff that ACV pays out less if a roof actually needs replacing.

The real-world effect is already showing up: a May 2026 industry survey found 54% of condo associations planned to raise regular dues to meet the new reserve numbers, and another 14% were bracing for a special assessment on top of that.

Picture a condo building as a clubhouse a bunch of families share. Everybody puts a little money into a shared piggy bank every month, in case the roof leaks or the elevator breaks. For years, the rule was: keep at least 10 cents of every dollar in the piggy bank. Now the rule says 15 cents. That's smart — a broken roof is expensive, and nobody likes a surprise bill.

But if the clubhouse wasn't already saving 15 cents, everyone's monthly dues might have to go up to catch the piggy bank up. And if the clubhouse can't get its piggy bank in order, the bank that lends people money to buy a room there might say "sorry, we don't lend here anymore" — which makes it a lot harder to buy or sell a room in that clubhouse, even if the room itself is perfectly fine.

When a building fails this test, the industry calls it "non-warrantable." That doesn't mean the building is unsafe or a bad investment — it just means Fannie Mae and Freddie Mac won't buy the loan. But it does mean fewer buyers can get a conventional mortgage there, which usually means less competition and a real discount: non-warrantable units often sell 10 to 20% below comparable units in warrantable buildings, simply because the buyer pool is smaller.

Case in point: my listing at 287 W Whispering Oaks Lane in Round Lake was exactly this — a non-warrantable, non-FHA-approved townhome, priced at $209,975. It just went under contract. The building's paperwork, not the unit itself, was what shaped the financing conversation — and for the right buyer, that wasn't a dealbreaker. It was the opportunity.

Portfolio loans. The bank keeps this loan on its own books instead of selling it to Fannie or Freddie, so it can set its own rules about which buildings it's willing to lend on. Usually means a bigger down payment — 20 to 25%, sometimes more — and a slightly higher rate, but plenty of local and community banks and credit unions do this routinely.

Non-QM loans. Built around you instead of the building — bank statements, assets, or, for investors, projected rental income, rather than a rigid box. More flexible underwriting, but expect a rate somewhere in the 1.5 to 3 point range above what a conventional loan would run.

Cash. It sidesteps the whole review process entirely. If the building's paperwork gets sorted out later — or the rules shift again, which they clearly still are — refinancing into a normal loan down the road is always on the table.

The move here isn't "stay away from these buildings." It's "ask about warrantability before you write the offer, not during underwriting." If you're not sure which financing path fits, or whether a building you love would even pass the new review, that's exactly the kind of question a 15-minute call is good for. No pitch, just information.

If you only remember four numbers from this issue, make it these:

None of this means avoid condos. It means know which condo you're buying into — the building's paperwork now matters just about as much as the unit itself.

That's the deep dive. Here's what's happening on the ground in Lake County this week:

This Issue Is Brought to You By Angelino’s Coffee

Most people won't think about condo financing until they're the one getting a surprise call from their lender three weeks before closing, or the one whose HOA fee jumps $150 a month with no warning. The rules changed quietly this year. Most people are going to find out the hard way.

You don't have to be one of them. If you own a condo in Lake County, a five-minute conversation with your association about reserves is worth having before your next renewal notice shows up. If you're shopping for one, ask about warrantability before you fall for a unit. And if a "too good to be true" condo price crosses your feed, it might just be a non-warrantable building — which, as we covered above, isn't automatically a red flag.

One Small Ask: If you know someone who owns or is shopping for a condo in Lake County, forward them this email. It might save them a headache come spring.

Until next week…