Kayvan Korouni

Condos remain a key affordable ownership path in the US, especially for first-time buyers, moderate-income households, retirees downsizing, and families in costly metro markets.
Recent agency policy brought helpful insurance flexibility, but ending limited reviews and raising reserve requirements also made condo loan origination more difficult.
Industry feedback suggested 60% to 80% of condo originations had used limited review, so its recent removal shifted most transactions into deeper underwriting.
As the change took effect, the market began seeing higher borrowing costs, less lender participation, and longer closing timelines for condo purchases.
Possible next steps include risk-based limited reviews for lower-LTV buyers, reusable project certifications, streamlined refinances, and a 1-yr delay for new reserve standards.

Condo Approval Rules Must Balance Risk and Access

Mortgage rates reached ~7% as the 10-yr Treasury hit ~5%, but the central bank’s recent hike did not directly set home loan pricing.
Policy moves can still influence mortgages indirectly when they shift Treasury yields, especially if investors expect inflation to stay firm and demand higher returns.
After the recent hike, Treasury yields briefly dipped, then climbed again as outside forces, especially oil prices and inflation, became the market’s main focus.
For buyers, the bigger issue is the full household budget; experts said families should plan for higher rates while watching overall costs.
Rates were likely to stay elevated, but they could ease if inflation cools and long-term yields fall, potentially bringing pent-up demand back quickly.