Financing a Maui Condo in 2026: What New Fannie Mae Rules, Insurance Costs, and HOA Requirements Mean for Buyers

If you’re financing a Maui condo in 2026, you’ve probably noticed two things happening at the same time.

First, the market has become much more favorable for buyers, with more inventory and increased negotiating power.

Second, getting a mortgage approved has become more documentation-intensive than it was just a year ago.

Those two trends are closely connected.

As Maui condominium associations continue dealing with rising insurance costs and new lending requirements, lenders are taking a much closer look at the financial health of every condominium project before approving conventional financing.

For buyers, understanding those requirements before writing an offer can save weeks of delays—or even prevent a failed escrow.

Here’s what changed in 2026 and what every Maui condo buyer should know before applying for a mortgage.

Is It Still a Good Time to Buy a Maui Condo?

For many buyers, yes.

The Maui condo market has shifted significantly over the past two years.

Inventory has increased substantially, giving buyers more choices than they’ve had in several years.

Properties are generally spending more time on the market, negotiations have become more common, and buyers often have greater leverage than they did during the highly competitive market of 2021 and 2022.

But while pricing has become more favorable, financing has become more detailed.

Today’s buyers need to qualify not only themselves—but, in many cases, the condominium project as well.

What Changed With Fannie Mae in 2026?

One of the biggest lending changes took effect on August 3, 2026.

Fannie Mae eliminated its long-standing Limited Review option for condominium financing.

Freddie Mac retired its comparable Streamlined Review process at the same time.

For most conventional condo loans, lenders must now complete either:

• a Full Project Review, or
• a qualifying Project Review Waiver.

That means lenders often need significantly more information from the condominium association before approving a loan.

Instead of a simplified review, lenders may now request documentation such as:

• HOA budgets
• financial statements
• reserve studies
• insurance certificates
• delinquency reports
• board meeting minutes
• information about pending litigation
• special assessments
• maintenance projects

If an association is slow to provide documents—or simply doesn’t have everything organized—it can delay financing.

Why Did Fannie Mae Change the Rules?

The changes are largely a response to growing concerns about condominium financial stability across the country.

Following several high-profile condominium failures and rapidly increasing insurance costs, Fannie Mae now expects lenders to verify that condominium associations are financially healthy and adequately insured before purchasing those loans.

The goal is to reduce lending risk.

For buyers, it means more paperwork—but hopefully stronger condominium associations over the long term.

How Does Condo Insurance Affect Financing?

Insurance has become one of the biggest issues affecting Maui condominium financing.

Since the 2023 Lahaina wildfire, many condominium associations have experienced dramatic increases in insurance premiums.

Some associations have seen master insurance costs double, triple, or even increase further, significantly raising monthly HOA dues.

Those higher costs affect buyers in several ways.

Higher HOA dues reduce purchasing power.

Insurance policies receive closer review from lenders.

Reserve funding becomes more important.

And condominium associations may need to adjust budgets to meet evolving lending requirements.

Because of these challenges, Fannie Mae also introduced insurance-related guideline changes during 2026, including updated standards for replacement-cost coverage and hurricane deductible limits.

Will HOA Fees Continue to Increase?

In many buildings, possibly.

Beginning with many loan applications in 2027, Fannie Mae will generally require condominium associations to contribute at least 15% of their annual assessment income toward reserves, an increase from the previous 10% guideline.

Associations that currently contribute less may eventually need to increase HOA dues or adjust their budgets to comply.

That doesn’t necessarily mean every Maui condominium will experience large HOA increases.

But buyers should understand whether their association is already well-funded or may need to make adjustments in the future.

Which Maui Condo Buildings Are More Likely to Experience Financing Delays?

Not every condominium faces the same lending challenges.

Financing delays are generally more common in projects with:

• inadequate reserve funding
• deferred maintenance
• large insurance deductibles
• pending special assessments
• active litigation
• significant HOA delinquency rates
• incomplete financial records
• insurance coverage issues
• management companies that respond slowly to lender requests

None of these automatically make a condominium unfinanceable.

They simply mean lenders may require additional documentation before approving the loan.

What Should Buyers Ask Before Writing an Offer?

One of the smartest things a buyer can do today is ask financing questions before making an offer.

I recommend understanding:

• Is the condominium currently warrantable?
• Has the association recently completed a reserve study?
• Are there pending special assessments?
• What does the insurance coverage look like?
• Are there any active lawsuits involving the HOA?
• Are major repairs planned?
• Are the financial statements current?
• Does the association respond promptly to lender requests?
• Have other buyers recently obtained conventional financing within the building?

Those answers often determine how smoothly escrow will proceed.

How Do Insurance Costs Affect Monthly Payments?

Many buyers focus only on the mortgage payment.

But condominium ownership also includes:

• HOA dues
• insurance costs
• property taxes
• reserve funding
• potential special assessments

In some Maui condominium communities, HOA dues now exceed $1,000 per month.

Understanding those costs before writing an offer is just as important as understanding the purchase price.

Are Local Lenders Better for Maui Condo Financing?

Not necessarily better—but often more experienced.

Lenders who regularly finance Hawaii condominiums generally understand:

• local HOA management companies
• condominium insurance issues
• project review requirements
• reserve studies
• Hawaii-specific underwriting concerns

Experience can often reduce delays because local lenders have already worked with many of the same condominium associations.

That doesn’t mean a mainland lender can’t finance a Maui condo successfully.

It simply means familiarity with Hawaii condominiums can sometimes make the process smoother.

What About Bill 9 and Maui Condo Financing?

Bill 9 doesn’t directly change lending requirements.

However, it has become another consideration for buyers purchasing certain apartment-zoned vacation-rental condominiums.

If a property is affected by Bill 9, buyers should also understand:

• current zoning
• Minatoya List status
• future permitted uses
• H-3 or H-4 hotel zoning eligibility
• long-term rental potential
• projected carrying costs

Lenders evaluate financial risk differently from buyers, but understanding both financing requirements and future zoning can help buyers make more informed decisions.

How Can Buyers Improve Their Chances of a Smooth Closing?

Preparation makes a tremendous difference.

Before writing an offer:

• Choose a lender experienced with Hawaii condominiums.
• Ask whether the building has recently completed conventional financing.
• Review HOA documents early.
• Confirm insurance information is available.
• Understand reserve funding.
• Budget for HOA dues rather than focusing only on the mortgage payment.
• Leave adequate time in your financing contingency for project review.

One of the biggest mistakes buyers make is assuming condominium financing works the same way it did several years ago.

Today, both the borrower and the condominium project receive much closer scrutiny.

The Bottom Line

Buying a Maui condo in 2026 can present excellent opportunities.

Inventory is higher.

Buyers generally have greater negotiating power.

Pricing has become more attractive than it was during the peak market.

But financing has become more detailed.

Understanding a building’s insurance, reserve funding, HOA financials, and project-review status before writing an offer can prevent unnecessary delays and reduce the risk of financing problems during escrow.

One of the most valuable things you can do before writing an offer is confirm that both you and the condominium are likely to qualify for financing.

If you’re considering a specific Maui condominium, I’d be happy to help you evaluate not only the property’s value, but also its financing profile. I regularly work with buyers, lenders, escrow companies, and local condominium associations to identify potential issues before they become expensive surprises.

I’m Benjamin Finnerty, REALTOR® on Maui and Director of Sales for The 808 Team. I work with buyers and sellers throughout Maui, with a particular focus on South Maui real estate, including Kīhei, Wailea, and Mākena.

Benjamin Finnerty REALTOR® RS-83812
Keller Williams Realty Maui RB-21851

This article is intended for general informational purposes only and should not be considered legal, tax, financial, or lending advice. Mortgage guidelines, Fannie Mae and Freddie Mac requirements, condominium financing standards, and insurance regulations can change. Buyers should consult with their lender and other qualified professionals regarding their specific situation.