Seattle Condo Financing: What to Check Before an Offer

Seattle condo financing depends on the building as much as on you. Before a lender approves your loan, the condo project itself has to meet Fannie Mae, Freddie Mac, FHA, or VA standards. In 2026 those standards changed: the quick review options were retired in August, and higher reserve requirements start in January 2027.

I have spent more than 25 years closing loans around Puget Sound, and I do not sell, I educate. Condos are a common way into the Seattle market, with medians in many neighborhoods between about $495,000 and $670,000 so far this year. They are also where I see the most deals fall apart late, almost always because of the building, not the buyer. This guide shows you what to check before you write an offer. For the bigger picture, see my Seattle home financing guide and the King County home loans hub.

Seattle Condo Prices in 2026 by Neighborhood Area

Here are single-unit condo medians for Seattle’s NWMLS map areas, January through August 2026, compared with the same months of 2025.

Figures are from the NWMLS King County area report for August 2026.

What this means for you: most Seattle condo medians fell this year, some by 10% or more, while West Seattle edged up. Every one of these medians sits far below the $1,063,750 King County loan limit, so a condo buyer usually has the full menu of conventional, FHA, and VA options, as long as the building qualifies. That last part is what the rest of this guide is about. My King County housing market 2026 report has the house prices for comparison.

Why Seattle Condo Financing Starts With the Building

When you buy a house, the lender looks at you and the house. When you buy a condo, the lender also looks at the homeowners association (HOA), because your unit’s value depends on how well the whole building is run. A building with thin savings, unpaid dues, or a structural lawsuit can turn a strong borrower’s file into a declined loan.

Lenders call a building that meets Fannie Mae and Freddie Mac standards “warrantable.” A building that does not is “non-warrantable,” which means a conventional loan is not available, even if your credit and income are excellent. FHA and VA have their own separate building approvals on top of that.

What Changed for Condo Loans in 2026?

Fannie Mae and Freddie Mac updated their condo rules together this year, in Fannie Mae Lender Letter LL-2026-03 and Freddie Mac Bulletin 2026-C. Here is what matters for Seattle buyers.

Sources: Freddie Mac Bulletin 2026-C (March 18, 2026) and the Fannie Mae Selling Guide as updated by Announcement SEL-2026-07 (August 5, 2026). Lender requirements can be stricter than agency minimums.

The 15% reserve rule is the one to watch. If you are under contract in December on a building with thin reserves and your application lands after January 4, the building may not pass. Ask about the reserve budget now, not at closing.

What Makes a Seattle Condo Ineligible for a Conventional Loan?

Under Fannie Mae’s current Full Review standards, these are the issues I watch for most in Seattle buildings:

• Unpaid dues. No more than 15% of units can be 60 or more days behind on HOA dues, and the same limit applies to special assessments.
• Thin reserves. At least 10% of the budget must go to replacement reserves today, rising to 15% for applications on or after January 4, 2027, unless an acceptable reserve study supports the plan.
• Critical repairs. Significant deferred maintenance or unsafe conditions make a building ineligible until they are fixed. Older brick buildings, aging roofs, and envelope work are common Seattle examples.
• Litigation. A lawsuit naming the HOA, or a developer lawsuit about safety, structure, or habitability, can block financing.
• Commercial space. No more than 35% of the building can be commercial. This matters in mixed-use buildings over shops in Capitol Hill, Ballard, and downtown.
• One owner holding too many units. In buildings with 21 or more units, no single person or company can own more than 20% of them.
• Hotel-style operation. Buildings run like hotels, with rental pools or daily rentals managed by the HOA, are not eligible.
• Not real estate. Houseboats are not eligible for conventional financing. Lake Union and Portage Bay floating homes are a special case, so talk with me before you fall in love with one.

Seattle has another wrinkle worth knowing. Many newer Seattle townhomes are not condos at all. They are built on individual lots under the city’s unit lot subdivision process, so they are financed like houses. Others are legally condos and need a project review. Your agent and I will confirm which you are looking at before you write an offer.

FHA and VA Condo Approval in Seattle

FHA loans typically allow 3.5% down, which makes them popular for first condos. The catch is that the building generally needs to be on HUD’s FHA-approved condo list. When it is not, a single-unit approval may be possible for some buildings, subject to HUD’s limits. Many older Seattle buildings have never applied for FHA approval or have let it expire, so I check the list on day one.

VA loans may allow eligible veterans to buy with no down payment, but the building must be on the VA’s approved condo list. If it is not, the HOA or lender can request approval, which takes time. If you plan to use VA, filter your search to approved buildings or start the request early.

VA disclaimer: A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans are subject to individual VA entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits.

Seattle Condo Financing Checklist Before You Make an Offer

Here is the order I walk my clients through.

Step 1: Get pre-approved with the condo in mind

Your pre-approval should account for HOA dues, which count in your debt-to-income ratio (DTI, the share of your income that goes to monthly debts). A condo with $700 a month in dues buys less than one with $350, even at the same price. Test it in my Seattle mortgage calculator, which has an HOA field.

Step 2: Identify the project before you tour

Get the building name and ask whether it is a condo, a co-op, or a townhome on its own lot. Ask whether it is FHA or VA approved if you plan to use either loan.

Step 3: Ask for the documents early

Through your agent, request the HOA budget, the most recent reserve study, the master insurance summary, meeting minutes, and any notice of special assessments or litigation. The lender will also send the HOA a condo questionnaire.

Step 4: Read the resale certificate

In Washington, the seller provides a resale certificate with the HOA’s dues, reserves, assessments, and pending issues. State law generally gives you a short window after you receive it to cancel the purchase, so read it right away and ask your agent about the exact timeline.

Step 5: Line up your HO-6 policy

Get an HO-6 quote early, and make sure its coverage meets or exceeds the master policy’s per-unit deductible. Insurance surprises are one of the most common late delays on condo closings.

Step 6: Plan for the money

Budget for the down payment, closing costs, any HOA transfer or capital contribution fees, and your first months of dues. My King County closing costs guide breaks down the rest.

What If the Seattle Condo Is Non-Warrantable?

A non-warrantable condo is not automatically off the table. Some can be financed through alternative loan programs that keep the loan on a lender’s own books, usually with a larger down payment and different terms. Whether that works depends on why the building fails, so the first step is understanding the specific issue. Sometimes it is temporary, such as an HOA that is about to finish a repair or raise reserves.

If you are buying the condo as a rental, a DSCR loan, which qualifies on the unit’s rent instead of your personal income, may be another path for some buildings. Everything is subject to credit approval, the building review, and a full loan estimate.

Seattle Condos for First-Time Buyers

Condos are often the first rung for Seattle buyers, and down payment help can make them more reachable. Conventional loans may allow 3% down for qualifying first-time buyers, and programs like the Washington State Housing Finance Commission’s Home Advantage, House Key Opportunity, and the City of Seattle’s down payment assistance may help, subject to income limits, price limits, and funding. Every condo median in the table above falls under House Key Opportunity’s $725,000 price cap. My first-time home buyer programs guide explains how to combine them. Looking at condos on the Eastside too? My Issaquah buyer’s guide covers the Highlands and Talus condo market.

Frequently Asked Questions: Seattle Condo Financing

Ready to Talk Through Seattle Condo Financing?

A Seattle condo can be a smart first home or a low-maintenance next one, as long as the building is ready for financing. Checking it before you write an offer is the single best way to avoid a late surprise. Let's connect to talk about your goals.

Keep exploring: Seattle home financing, Seattle neighborhood guides, King County home loans, conventional loans, and Keith Akada, Seattle mortgage broker at Fairway Independent Mortgage.