Buyers in the East Cut, Rincon Hill and South Beach towers used to count on a familiar tradeoff. Put enough cash down, and the lender took a shorter look at the condo association behind your unit. That tradeoff ended on Aug. 3, 2026. It ended just as downtown condos started selling quickly again, which leaves buyers less time to collect the documents a lender now wants.
The building's finances now sit next to yours in underwriting. For a two-bedroom priced near this year's South Beach median, the amount of cash you put down also decides which set of lending rules applies to the building. That makes the HOA packet the first document worth reading, ahead of the floor plan.
What changed in the condo review on Aug. 3
Fannie Mae has retired its Limited Review process for condo projects. Lenders must apply that change to every loan application dated on or after Aug. 3, 2026. Established projects that used to qualify for the shorter review now need a Full Review, or a waiver where one applies. Freddie Mac dropped its matching Streamlined Review on the same date.
The shorter reviews used to go to certain loans with lower loan-to-value ratios. In practice, a larger down payment bought a narrower look at the association. As National Mortgage Professional reported in July, starting Aug. 3 a larger down payment no longer earns that shorter path. The waiver options expanded in March cover certain projects with 10 or fewer units, far fewer than any tower on Folsom, Harrison, Fremont or Spear. The deadline removed a widely used shortcut for larger established projects, though a given loan can still qualify for another permitted waiver or exemption.
A Full Review looks at the association's budget, reserve funding, insurance policies, inspection reports, litigation, special assessments, owner delinquencies and critical repairs. Boards and management companies hold most of that paperwork, and lenders can't control how fast they produce it. Before the deadline, the head of the Community Home Lenders of America estimated the documents could cost $100 to $1,000 per project. He also questioned the policy:
"Limited review has long provided a practical, risk-balanced, less expensive pathway for financing condos — especially for entry-level and workforce housing. Eliminating it raises an important question: Are we solving for risk or unintentionally increasing expense in aggregate while restricting access to credit?"
A September column in HousingWire reported that members of that lender group estimated 60% to 80% of condo loans had gone through Limited Review before it was retired. The column also passed along industry reports of higher borrowing costs and longer closings since then. It is an opinion piece from a trade-group perspective, not a study of San Francisco closings. We haven't found any local reporting yet that measures delays, or that names a downtown building as newly ineligible because of the August change. Treat the change as a risk to check for in every building.
Where the conforming limit falls in South Beach
Fannie Mae's rules only apply to loans Fannie Mae can buy. FHFA's 2026 one-unit conforming limit for San Francisco County is $1,249,125. Loans above that amount are jumbo loans, and the test is the size of the loan, not the purchase price.
South Beach condos sold at a median of $1,615,000 in August 2026, across 18 sales tracked in the neighborhood's condo towers. With 20% down, that median unit means a loan of $1,292,000, about $43,000 over the line. The table shows the down payment several of August's actual sales would have needed to keep the loan at or under $1,249,125.
| August 2026 sale | Building | Price | Down payment to stay at the limit | Share of price |
|---|---|---|---|---|
| 338 Spear St #8G | The Infinity | $792,000 | 20% down already fits | 20% |
| 318 Spear St #8H | The Infinity | $1,600,000 | $350,875 | About 22% |
| 401 Harrison St #12F | The Harrison | $1,630,000 | $380,875 | About 23% |
| 338 Main St #5A | Lumina | $1,700,000 | $450,875 | About 27% |
| 425 1st St #2003 | One Rincon Hill | $1,739,000 | $489,875 | About 28% |
| 201 Folsom St #24A | Lumina | $2,218,000 | $968,875 | About 44% |
The middle of this market sits right around the conforming limit. Fourteen of August's 18 South Beach sales were two-bedrooms. A buyer looking at a $1.6 million unit at The Harrison or The Infinity can end up on either side of the limit, depending on whether they put down about 20% or a little more than 22%. Before August, adding more cash pushed the loan under the limit and could also get the building a lighter review. Now, adding cash still makes the loan conforming, but the building will generally have to pass a full agency review.
Above the limit, a jumbo or portfolio lender applies its own condo standards. Those products can come with different pricing, down payment, documentation and property eligibility rules. That doesn't mean the building escapes scrutiny. The reviewer just works for a different lender. Which route makes sense depends on your lender and your finances. Run the numbers on both before you write an offer, not after.
A fast market leaves little time to gather HOA documents
The time pressure comes from the sales pace. South Beach's median unit went under contract in 12 days in August 2026, half the neighborhood's pace for the year so far. Four of the 18 sales recorded zero days on market. The August median of $1,294 per square foot was the neighborhood's highest monthly figure of 2026, 8% above its year-to-date rate.
Citywide, the August 2026 condo median rose 22% from a year earlier to $1.233 million. Active condo listings fell 36%, and 54% of condos sold over asking, up 31 points. The demand clusters close to these towers. Companies leased 8 million square feet of San Francisco office space in the first half of 2026, and the new AI startups have mostly chosen Class A buildings in places like the East Cut, The Frisc reported. The San Francisco Standard describes Fifth Street as the dividing line, with large office leases and condos selling again to the east.
In a 12-day market, buyers tend to write fast and shorten contingencies. Under a Full Review, lenders are now being warned that the condo, not the borrower, may be what adds conditions or delays closing. A board that can't produce current financials or insurance documents can put an otherwise solid loan at risk. At the top of the market, the pace was slower. The Avery's three August sales, at $4.75 million, $3.885 million and $3.65 million, took 49, 94 and 103 days. The fast sales were the conforming-range two-bedrooms, where the new review applies most directly.
One caution about reading too much into a single month. Prism's September report points out that August was the first month of data under the new condo lending rules. It says it is too early to separate their effect from the usual late-summer slowdown.
The HOA documents to request before you write an offer
Fannie Mae's 2026 rules spell out what the building has to show. The most useful questions follow directly from them:
- Master insurance. For applications on or after July 1, 2026, the master policy must cover at least 100% of estimated replacement cost, and the per-unit deductible can't exceed $50,000.
- Your own HO-6 policy. If the master policy leaves part of your unit's interior uncovered or carries a per-unit deductible, you need a unit-owner policy at least as large as the uncovered portion or the deductible, whichever is greater. Get a quote early, because the premium goes into your monthly costs.
- Reserve study funding. When a lender relies on a reserve study, the budget must now fund the study's highest recommended allocation. The baseline funding method, which lets the reserve balance drift toward zero, is no longer accepted.
- Litigation and repairs. Fannie Mae ties underfunded reserves to buildings that need critical repairs, and says owners in those buildings can face special assessments or higher dues. Downtown has seen this before. In June 2025, the Standard reported that the Mira had been flagged by Fannie Mae and Freddie Mac over unresolved litigation. At that time, 19 San Francisco projects were on the list, four for pending litigation and ten for critical repairs or deferred maintenance. That reporting is more than a year old and doesn't describe any building's status today. The list is confidential, so ask your lender to check the specific project.
The next deadline is Jan. 4, 2027
For Full Review applications dated on or after Jan. 4, 2027, the minimum share of an association's budgeted income that must go to replacement reserves rises from 10% to 15%. If a building's current budget falls between those two numbers, it meets the rule today and won't in January unless the board changes the budget. There's no published data on downtown SF towers. In Florida, one lender's manual review found about 30% of projects funding reserves below the 15% threshold. That's a different state with different pressures, and it gives no reading on San Francisco. The question to ask is simple: what percentage of this year's budget goes to reserves, and what does next year's draft budget show?
The rules also loosened in one area. Fannie Mae dropped its 50% limit on investor-owned units for established projects under Full Review, which matters to investor buyers in towers with many rental units.
FAQ
Does a jumbo loan avoid the new Fannie Mae review?
The agency rules don't apply to a jumbo loan, but the jumbo lender reviews the project under its own standards. Those can differ on pricing, down payment, documentation and which properties qualify.
Should I wait until after January to buy?
The Jan. 4, 2027 reserve change applies by loan application date. A building that meets the 10% minimum today may need a budget change to meet 15%. Find out where your target building stands before you decide the timing.
Can I still get a conventional loan at the Mira?
The 2025 reporting on the Mira describes its status at that time, not today. A lender can check the project's current eligibility before you make an offer.
If you're comparing two-bedrooms at The Harrison, Lumina or One Rincon Hill and want to know which side of the $1,249,125 line your offer falls on, and how the building's reserves and insurance hold up, Russell Pofsky can review the HOA packet with you before you write. Schedule a free consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
