Condo Living Made Easy

Recent updates to condominium financing guidelines from Fannie Mae and Freddie Mac could have important implications for small condominium associations. These changes focus on insurance standards, financial transparency, and reserve funding, all areas where smaller buildings sometimes face unique challenges. Because mortgage lenders rely on these guidelines when approving loans, the financial health and documentation of a condominium association can directly affect whether units qualify for conventional financing.

Small condo buildings typically operate with limited budgets and fewer administrative resources. While this can simplify operations, it can also make it harder to meet lender expectations for financial records, insurance coverage, and reserve planning.

As lending standards continue to emphasize stability and risk management, small associations may need to pay closer attention to how their finances and insurance policies are structured.

Key Areas to Watch

• Insurance Coverage: The requirement to insure roofs at full replacement cost has been removed, which may help with rising insurance expenses. However, associations must still maintain adequate insurance for the building and ensure their master policy meets lender requirements.
• Budgeted Reserves Contributions: Beginning in January 2027, budgets must show a minimum of 15% of total income allocated to Reserves (currently this figure is 10%). Exceptions will be made for associations following a reserve study that recommends a smaller amount provided that amount is the fully funded figure. This would be extremely rare.
• Retirement of the Limited Review Option: Loan applications on or after August 3rd will be subject to Full Review requirements, which increase the burden of documentation on associations. There is expanded eligibility for a waiver of project review for associations up to 10 units, however, which may help smaller communities.

For small associations without professional management, ensuring compliance with lending requirements and processing the documentation needed for sales and refinances can be time-consuming and complicated. Haus Financial Services takes the burden off the board with our complete financial processing and supplementary services, ensuring owners reach their closing successfully.. Learn more at hausfs.com

As the "Big Thaw" arrives, Chicago condo dwellers are heading outside. To keep your community safe and compliant with city ordinances, we’re highlighting two critical areas for Board oversight this month: weight limits and fire codes.

Planters: Watch the Weight

Chicago balconies are sturdy, but they aren't invincible. The freeze-thaw cycle can stress masonry, and adding heavy saturated soil makes it worse.

• The Risk: Large ceramic pots filled with wet soil can exceed pounds-per-square-foot limits, risking structural cracks or drainage issues.
• Board Tip: Encourage residents to use fiberglass or resin pots instead of stone, and "filler" (like recycled plastics) at the bottom of deep planters to reduce soil weight.
• Wind Factor: Remind owners that April gusts are no joke—all planters should be secured or heavy enough not to become projectiles, but light enough for the slab to support.

Grilling: Propane vs. Electric

Chicago Fire Code is notoriously strict regarding multi-unit dwellings. A single violation can lead to heavy fines for the Association.

• The "No-Go" List: Per City Code, charcoal and propane grills are strictly prohibited on balconies of multi-unit buildings. Storing propane tanks indoors or on balconies is a major safety violation.
• The Electric Exception: Generally, only electric grills (with no open flame) are permitted.
• Clearance: Remind residents that even electric grills must be kept at least 10 feet away from combustible materials (like siding or dry privacy screens).

Action Items for the Board

1. Information Blast: Send a "Spring Checklist" to all residents highlighting these specific rules.
2. Visual Inspection: Do a quick walk-through to spot any prohibited propane tanks before grilling season peaks.
3. Rule Refresh: Ensure your Rules & Regulations clearly state the penalties for fire code violations to shield the Association from liability.

By staying proactive on these "balcony basics," you can prevent structural damage and fire hazards before the first burger hits the grill. A little communication now ensures a safer, more relaxed summer for the entire building.

If your balconies are in need of repair or replacement to bring them in line with current Chicago code requirements, Condoly can help! Source bids for free with the Condoly app.

Learn how to finance your major projects with the "Funding Capital Repairs - Loans" module in the Condoly community on Skool.

Spring is a natural time for fresh starts, and that includes condo association management. As maintenance projects ramp up, boards can benefit from taking time to organize important documents, policies, and records to ensure everything is easy to access and up to date.

• Review Governing Documents: Boards should periodically revisit governing documents such as bylaws, declarations, and community rules. A spring review helps ensure policies remain relevant and clearly communicated to residents.
• Organize Contracts and Records: Vendor contracts, maintenance logs, and service agreements should be stored in a clear and consistent system. Organized records help boards track renewal dates, evaluate vendors, and quickly reference past work when planning future projects. Condoly.io is the perfect tool for property management & maintenance solutions for your community.
• Update Financial Documents: Spring is also a good time to review budgets, invoices, and reserve contributions. Keeping financial records organized supports transparency and helps boards prepare for audits, tax filings, and long-term planning. Haus Financial Services specializes in financial stability, cost-effective management support and legal compliance for condo associations with up to 20 units with small budgets.

Taking time to organize documents and records each spring helps condo boards operate more efficiently and stay prepared for the year ahead. A little administrative “spring cleaning” can go a long way in strengthening communication, improving transparency, and supporting responsible association management.