What should you check before buying a Denver condo?
Start with the HOA’s insurance list and its budget, then line both up against your contract deadlines. When you’re buying a Denver condo, the deductible line can matter more than the price.
Here’s an example. You’re under contract on a two-bedroom in Capitol Hill. The Association Documents land in your inbox, and the insurance list shows the building’s master policy carries a $50,000 per-unit deductible. That number sits right at the cap Fannie Mae allows, so the project can still pass. The catch is that your own policy now has to cover it.
If a hailstorm damages the roof, the declaration may let the HOA pass that deductible to each owner. On this example, that’s up to $50,000 per unit, due from owners who thought the master policy had them covered.
This post shows which HOA documents to pull and when under the Colorado contract, how the deductible lands on your HO-6, and the Fannie Mae project rules that can stop a conventional loan late in the deal.
What Changed at Fannie Mae in 2026
Fannie Mae published Lender Letter LL-2026-03 on March 18, 2026. It retired the Limited Review process for loan applications dated on or after August 3, 2026. Limited Review was the lighter check many established condo projects used. Without it, more Denver condo loans run through a Full Review, which asks the HOA for more paperwork.
The same letter raises the reserve minimum. Under a Full Review, the HOA’s budget must set aside at least 10% for replacement reserves today. For loan applications dated on or after January 4, 2027, that minimum becomes 15% of the annual budgeted assessment income.
The Summit County version of this story, with the mountain-resort angle, is in my post on conventional loans for Summit County condos. This one stays in Denver.
The HOA Documents to Request Under the Colorado Contract
The Colorado Real Estate Commission’s Contract to Buy and Sell Real Estate (Residential), for use on or after January 1, 2026, puts the Association Documents on the seller. Section 7.2 says the seller provides them at the seller’s expense by the Association Documents Deadline, and it authorizes the HOA to send them to you directly. The contract forms are posted on the Colorado Division of Real Estate’s contracts page.
What Section 7.3 Covers
The list in Section 7.3 is longer than most buyers expect. These are the items that matter most for a loan:
- Insurance (7.3.3): each Association policy, with limits, deductibles, and expiration dates.
- Assessments (7.3.4): regular and special assessments, by unit type.
- Financials (7.3.5): the current operating budget, recent financial statements including reserves, and the reserve study, if one exists.
- Construction defect notices (7.3.6): any notice of a construction defect action received in the past six months.
Your Termination Window
Section 7.4 gives you the Right to Terminate on or before the Association Documents Termination Deadline if anything in those documents is unsatisfactory to you. If the documents arrive late, you get ten days after receipt. Section 15.3.1 also puts any fee for the HOA’s status letter on the seller.
The Master Policy Deductible and Your HO-6
Fannie Mae’s Selling Guide caps the master policy’s deductible at 5% of the coverage amount, with a maximum of $50,000 per unit (B7-3-03). If the master policy uses a per-unit deductible, you must carry a unit owner’s policy, often called an HO-6.
That HO-6 has its own rules under B7-3-04. Its coverage has to be at least the greater of the cost to restore your unit’s interior or the master policy’s per-unit deductible. Its own deductible can’t exceed the greater of 5% of coverage or $2,500.
Ask your insurance agent about loss assessment coverage too. It’s the part of an HO-6 that can pay your share when the HOA bills owners after a covered loss. Read the deductible in 7.3.3 first, then price your policy around it.
Reserves and Special Assessments
Reserves are the HOA’s savings for big items like roofs and elevators. Here’s a worked example on an assumed $600,000 annual budget. At 10%, the reserve line needs to be at least $60,000. At 15%, it needs $90,000. A Full Review can also accept a qualifying reserve study in place of the percentage test.
Special assessments deserve a close read in 7.3.4 and the meeting minutes. Under Fannie Mae’s Ineligible Projects section, a project with critical repairs is ineligible. One listed example is unfunded repairs costing more than $10,000 per unit that should be done within 12 months. If a special assessment pays for a critical repair that hasn’t been fixed yet, the project stays ineligible.
Litigation and Single-Entity Ownership
Two more items in B4-2.1-03 can stop a loan on a building that looks fine on a showing.
Litigation is the first. A project where the HOA is named in pending litigation is generally ineligible. Minor litigation is an exception, such as a non-monetary neighbor dispute, or a case where damages and legal costs aren’t expected to exceed 10% of the project’s funded reserves.
Ownership concentration is the second. In a project with 21 or more units, one entity can’t own more than 20% of them. In projects with 11 to 20 units, the limit is two units. Smaller buildings can hit that limit when one investor holds a few units, so ask early.
Timing the Condo Questionnaire Against Your Deadlines
Your lender sends the HOA or its management company a questionnaire to confirm these facts. The answers can take time, and they can arrive after the Association Documents. That gap is where condo deals get tight.
The contract’s loan dates are the New Loan Terms Deadline and the New Loan Availability Deadline in Section 5.2, plus the Appraisal Deadline and Appraisal Objection Deadline in Section 6. Section 5.2.2 limits what you can terminate for after loan availability, so the questionnaire result needs to come back with room to spare. A real estate attorney can walk you through how your contract treats a project that fails review. Your lender can tell you which review your loan needs.
Jamie Bridges, a REALTOR® with Keller Williams Realty DTC, works with condo buyers in Capitol Hill, Cherry Creek, and Uptown, and out to Lakewood and Aurora. He holds the Accredited Buyer’s Representative (ABR) designation. Before an offer goes in, he asks your lender which project review your loan needs, then sets the Association Documents Deadline early so the questionnaire has time to come back before your New Loan Availability Deadline.
For the price side of the Denver condo market, see my post on Denver condo prices.
Frequently Asked Questions
Does Fannie Mae still offer a Limited Review for Denver condos? No. Lender Letter LL-2026-03 retired it for loan applications dated on or after August 3, 2026. Established projects now go through a Full Review or another path your lender confirms, and some loans qualify for a waiver of project review.
When does the 15% reserve rule apply? It applies to loan applications dated on or after January 4, 2027, when the lender uses a Full Review. Until then, the Selling Guide minimum stays at 10% of the budget.
Who pays for the HOA status letter in Colorado? The seller. Section 15.3.1 of the 2026 Colorado residential contract says any fee for the Association’s status letter must be paid by the seller.
If you’re looking at a condo in Denver, Lakewood, Aurora, or Glendale, ask for the insurance list and the budget before you fall for the floor plan. Jamie Bridges is a REALTOR® with Keller Williams Realty DTC serving the Denver Metro Area and Summit County, Colorado. Call or text Jamie at 720-397-7555 to talk about your next move.
Sources: Fannie Mae Lender Letter LL-2026-03, Updates to Project Standards & Property Insurance Requirements, March 18, 2026; Fannie Mae Announcement SEL-2026-07, August 5, 2026; Fannie Mae Selling Guide B4-2.1-01, B4-2.1-03, B4-2.2-02, B7-3-03, and B7-3-04, each dated August 5, 2026, accessed October 30, 2026; Colorado Real Estate Commission Contract to Buy and Sell Real Estate (Residential), for use on or after January 1, 2026, Sections 3.1, 5.2, 6, 7, and 15.3, via the Colorado Division of Real Estate, accessed October 30, 2026. Data deemed reliable but not guaranteed. General information only. This isn’t legal, insurance, or lending advice. Talk with a real estate attorney, your insurance agent, and your lender about your purchase. Dollar figures marked as examples are illustrations only.
