How I Really Feel About Condos
Are condos a good investment? Generally, I'm skeptical. Condos are typically the first real estate segment to react to a downturn and the last to recover, financing them has gotten significantly harder in 2026 and the building's financial health matters as much as the unit itself. That said, they're a genuinely smart choice for the right buyer and the right building.
I've been asked to write about how I actually feel about condos and I'll be honest with you the way I'd be honest with a client. There are hardly any condos in the northeastern part of the Metroplex, so this isn't something I deal with often, maybe once or twice a year. But when the question comes up, I have real opinions and I'd rather share them plainly than give you a neutral non-answer.
They're the First to Fall and the Last to Recover
In a downturn, condos are typically the first segment of the market to soften and historically among the slowest to recover. Part of that is who buys them, more investors and more price-sensitive first-time buyers, both groups that pull back fastest when conditions tighten. If you're thinking about a condo as an investment specifically, that cycle sensitivity is worth taking seriously before you buy at what might be the top.
Financing Has Gotten Genuinely Harder in 2026
This is the part I think people underestimate. FHA financing on condos is already difficult, since a building has to be on HUD's approved list and plenty of buildings simply aren't. Conventional financing isn't much easier right now either. Fannie Mae and Freddie Mac are in the middle of a major overhaul: Limited Review, the shortcut that let buyers with 25% or more down skip a full building financial review, is being eliminated August 3, 2026, for buildings with 11 or more units. On top of that, required HOA reserves are jumping from 10% to 15% of the annual budget by January 2027.
Buildings that don't meet the new standard become non-warrantable, which means conventional financing disappears entirely for units inside it. Buyers in those buildings get pushed toward non-QM or portfolio loans, which typically demand larger down payments and higher interest rates. This isn't a hypothetical risk anymore, it's happening on a specific, current timeline and it's exactly why I tell anyone considering a condo to check the building's financing status before they fall in love with a unit.
You Own From the Walls In and Not Every Association Is Equal
A true condo purchase means you own the interior, from the walls in, while the association is responsible for the exterior and shared structures. That arrangement only works as well as the association running it. Some HOAs are underinsured, defer maintenance for years, and then hit owners with a large special assessment all at once to catch up. This pattern isn't unique to any one state, it's part of a broader reckoning the entire condo industry has been going through since the 2021 Surfside building collapse in Florida, which pushed lenders and associations nationally toward much stricter reserve and inspection standards. The financing tightening above is a direct result of this.
What Texas Buyers Can Actually Do About It
This is the practical takeaway, not just a warning. Texas law requires sellers to provide a resale certificate before closing on a condo and it discloses the HOA's financial condition, current reserve levels, any pending litigation and any known upcoming assessments. Don't treat this as paperwork to skim. It's the single best tool you have to see whether a building is being run well before you're financially attached to it. I'd also ask directly for a recent reserve study and the association's insurance declarations page, not just take the resale certificate's summary at face value.
Check the Rental Rules Too
If part of your interest in a condo is as an investment property, look closely at the association's rental restrictions. Many HOAs cap the percentage of units that can be rented out at any given time, or require minimum lease terms that rule out short-term rental income entirely, and some of them even require you to vet the tenant thru them. This can materially change whether a condo actually fits your investment goals, and it's worth confirming before you buy, not after.
The Resale Pool Is Smaller Than You'd Think
Because financing is harder to get, the pool of qualified buyers for any given condo is naturally smaller than for a comparable single-family home. That can mean a longer time on market when you're ready to sell, and days on market has real consequences, buyers start to wonder what's wrong with a listing that's been sitting, even when the honest answer is just a smaller buyer pool to begin with.
When a Condo Actually Makes Sense
I don't want this to read as entirely negative, because it isn't. A condo can be a genuinely smart choice for the right buyer:
● Someone who travels often or splits time between homes and wants a true lock-and-leave lifestyle
● A buyer who specifically doesn't want yard work or exterior maintenance and values that tradeoff
● Someone whose only realistic entry point into a specific high-demand location is a condo, when single-family homes there are out of reach
● A buyer purchasing in a building with genuinely strong reserves, clean insurance, and a well-run association, which is a completely different risk profile than a poorly managed one
The building matters as much as the unit, sometimes more. A well-run association with healthy reserves and appropriate insurance is a fundamentally different purchase than one that's been quietly underfunding itself for a decade, even if the units themselves look identical.
Frequently Asked Questions
Can I still get an FHA loan on a condo?
Only if the specific building is on HUD's approved condo list. Many buildings aren't, which is one of the reasons condo financing is more limited than financing for a single-family home.
What does it mean if a condo is non-warrantable?
It means the building doesn't meet Fannie Mae or Freddie Mac's standards, typically due to reserve levels, insurance, or pending litigation, so conventional financing isn't available. Buyers are left with non-QM or portfolio loan options, which usually mean higher down payments and rates.
What should I always request before making an offer on a Texas condo?
The resale certificate is required by law and covers the basics, but I'd also request a current reserve study and the HOA's insurance declarations page directly, rather than relying only on the certificate's summary.
Thinking About a Condo?
I don't sell many condos in this part of the Metroplex, but when the question comes up, I'll give you my honest read on the specific building, not just the unit. Jeanie Marten Real Estate is happy to walk through whether a condo fits your specific goals. Visit MartenTeam.com or book a consultation.
Financing details reflect Fannie Mae and Freddie Mac guideline changes rolling out in 2026 and 2027. Rules vary by lender and building, and this is general information, not financial or legal advice.
