Changes are underway in the condominium lending world, and if you're planning to sell your Madison area condo in the next year or two, they are worth understanding now — before they affect your sale.

Beginning this month, mortgage lenders will be required to dig deeper into a condo association's finances and insurance before approving a buyer's loan. In plain terms: if your association's budget and insurance don't meet new lending guidelines, it could become harder for your buyers to get a conventional loan  — which can slow down a sale. The good news is that with some proactive planning, you and your association can get ahead of it.

Here's what's changing, and what we recommend you do about it. 

(photo courtesy of Step Inside Media) 

Beginning August of 2026

Lenders will be required to conduct more thorough reviews during the underwriting process. For most condos, this means a closer look at:

• The condo association financial statements and budget
• The insurance the condo association carries 
• A recently completed "condo questionnaire" about how the association operates

Beginning January of 2027

Underwriting guidelines will require associations to set aside more money for future repairs and upkeep: at least 15% of the condo budget must go toward reserves, up from the current 10%. 

How to prepare for your condo sale

Here's what we recommend:

• Schedule a planning session with your Mad City Dream Homes realtor well before you need to sell. We recommend doing this several months — or even a full year — before your intended sale date.
• Share your association's financials, condo budget, condo questionnaire, and insurance policy with your agent. These are the documents lenders will be scrutinizing most closely.
• With your permission, we'll bring in the condo team from a trusted local lender to review the documents. They'll flag any glaring issues that could potentially affect your condo's eligibility for conventional financing — before a buyer ever gets involved.

If we do find issues, being proactive gives you and your association time to fix them before your condo hits the market, rather than scrambling during your sale. 

These changes are nuanced and new, and you're likely to have questions about how they apply to your specific association. Please don't hesitate to reach out to us — we're here to help you navigate this together.