Buying a Condo or Townhome in Dallas-Fort Worth
Buying a Condo or Townhome in Dallas-Fort Worth
Quick answer. I'm Nitin Gupta, a broker associate with Competitive Edge Realty, and I have closed 480+ DFW transactions. I hold the CRS, GRI, CLHMS, ALHS, ABR, SRS, SRES, MRP, PSA, e-PRO, TRLS and TRPM designations and certifications. Here is the thing nobody tells you before you write an offer: on a condominium, the lender is not only underwriting you and the unit. It is underwriting the entire project. A buyer with excellent credit and a large down payment can be declined because of the association's reserve account, an open structural repair, or an inspection the building never completed. Those rules got stricter in 2026 and get stricter again in January 2027. Texas gives you a short window after you receive the association's documents to walk away. That window is the whole ballgame.
Is a townhome a condominium?
Often not, and the answer changes almost everything that follows. The word townhome describes a shape, not a form of ownership.
Two properties can look identical from the street and be legally different. In a fee-simple townhome you own the structure and the ground under it, and you belong to a property owners association. In a condominium regime you own a defined airspace and an undivided interest in the common elements, and the association owns the structure itself. The same thing is true of many so-called garden homes and patio homes, and increasingly of newer attached product across DFW.
Why it matters. A condominium falls under Chapter 82 of the Texas Property Code and carries the resale certificate and cancellation rights described below. A fee-simple townhome in a property owners association falls under Chapter 209 instead, with a different disclosure regime. More consequentially for financing: the project review requirements that cause most declines apply to condominium regimes. A fee-simple townhome is usually underwritten much like a single-family house.
So the first question on any attached property is not the HOA dues. It is what the deed actually conveys. The answer is in the recorded declaration, not in the listing, and listings get this wrong often enough that I verify it before anything else.
Why the project matters more than the unit
On a house, an appraisal problem is about that house. On a condominium, the most common reason a clean borrower cannot close has nothing to do with the borrower or the unit. It is the project.
Lenders evaluate the association's budget, its reserve funding, its insurance, its litigation, its delinquency rate, the ratio of owners to renters, and whether the building has deferred repairs that affect safety or structural integrity. If the project fails, the loan fails, and it fails for every buyer of every unit in the building, not just you. You cannot fix it with a larger down payment, and the seller usually cannot fix it at all within your contract timeline.
This is why a condominium can sit unsold for a long stretch in a market where everything else moves. Something at the project level has closed the building to conventional financing, and the only remaining buyers are cash or portfolio-lender buyers. When a well-located unit is priced below its neighbors, the project is the first place I look.
What changed in condominium financing in 2026
Fannie Mae revised its project standards during 2026, and the changes run in both directions. Treat the dates as the thing to anchor on, because the specific thresholds move and your lender has the current ones.
Limited Review has been retired
Established condominium projects used to be eligible, in some circumstances, for an abbreviated project review. That option is gone for loan applications dated on or after August 3, 2026. Established projects now go through a Full Review, or through a waiver where one applies.
The practical effect is that projects which used to slip through with light scrutiny now get the full examination. If someone tells you a building financed easily a couple of years ago, that is no longer evidence of anything. Verify it against today's rules.
The reserve requirement increases in January 2027
For Full Review loans, the minimum replacement reserve allocation an association must budget rises for applications dated on or after January 4, 2027. Separately, as of August 2026 lenders may no longer rely on the baseline funding method when a reserve study is used in place of the standard allocation, and must use the highest recommended funding level in that study.
Read that as a forward-looking risk. A building that qualifies on today's budget may not qualify on the same budget in January, and associations set budgets annually. If you are buying in a marginally funded project in the fourth quarter, ask what next year's budget does to the reserve allocation before you remove your financing contingency. This is the single most useful question on this page and almost nobody asks it.
Very small projects got easier
A waiver of the project review is now available for projects with ten or fewer units. Projects in the five-to-ten-unit range must not be part of a master association or a larger development to qualify. Given how much small attached infill DFW has built, this helps more buyers here than it would in most markets.
The investor limit went away, the presale rule did not
The cap on investment-property concentration in established projects under Full Review has been retired. That is genuine relief in buildings with heavy rental ownership. But the presale requirement still stands: at least half the total units must be conveyed to, or under contract with, buyers who will occupy them as a principal residence or second home. In a new or newly converted project, that requirement is the one that delays closings.
What makes a project unfinanceable
Ask about each of these specifically. The association's questionnaire is where the deal usually dies, and it dies quietly.
Critical repairs. Conditions affecting safety, soundness, structural integrity or habitability make a project ineligible until the work is finished. The named examples are mold, water intrusion, structural deterioration, roof failure and unsafe balconies. A special assessment levied to pay for that work does not cure it. The repairs have to be complete.
Failed or missing inspections. A project that has failed a mandatory state, county or local inspection, or that has not obtained a required recertification, is ineligible. Lenders are also required to review any structural or mechanical inspection report completed in the past three years, not only mandatory ones. So a voluntary engineering report commissioned by a conscientious board can itself surface a problem.
An incomplete questionnaire. If the association will not or cannot answer the lender's questions well enough to confirm there are no critical repairs, the loan is not eligible. A disorganized or self-managed association is a financing risk in its own right, independent of the building's actual condition.
Project status flagged by the agency. Fannie Mae maintains a project database, and a project marked unavailable in it is ineligible regardless of review type. An association can get that re-evaluated by submitting documentation, but not on your timeline.
Litigation, delinquency and insurance. Pending suits against the association, a high share of owners behind on assessments, or master insurance that does not meet requirements will each stop a loan.
Your lender runs these checks. The problem is that it often runs them late, after your option period has expired and your earnest money is at risk. The sequencing is yours to manage, and I manage it by getting the questionnaire moving on day one rather than waiting for the lender to request it.
What the Texas resale certificate must tell you
For a condominium, Section 82.157 of the Texas Property Code requires the seller to provide the declaration, the bylaws, the association rules and a resale certificate issued by the association. The certificate has to be prepared no earlier than three months before it is delivered to you, and the association has ten days to produce it after the owner requests it in writing. If the association misses that deadline, the owner may instead deliver a sworn affidavit stating the request was made and not timely answered.
The certificate has to disclose a specific list, and this is the part worth reading line by line rather than skimming:
Transfer restrictions, including any right of first refusal
Current assessments, and any amount the seller currently owes and has not paid
Capital expenditures approved for the coming year, and the amounts held in reserve
Unsatisfied judgments against the association and any pending lawsuits
Insurance coverage carried by the association
Alterations known to the association that violate the governing documents
Any notice of a health or building code violation the association has received
Remaining terms of leases the association holds, the managing agent's contact information, and the fees charged on transfer
Two protections come with it. If the certificate understates what the seller owes, you are not liable for the delinquent amounts above the stated total that were already unpaid when it was prepared. And a buyer, lender or title insurer who relies on the certificate is not liable for debts or claims it failed to disclose. Those protections depend on the certificate actually being obtained, which is one reason waiving it is a worse idea than it sounds.
The approved capital expenditures line and the pending litigation line are the two I read first. A board that has approved a large project for next year has told you a special assessment is likely, whether or not one has been levied. The questions to ask about a community's finances apply with more force here than anywhere, because in a condominium you are buying into a shared balance sheet.
Your seven-day window
The TREC Residential Condominium Contract treats the documents and the certificate as separate deliverables, each with its own clock. If you had not received the declaration, bylaws and rules when you signed, the seller delivers them within an agreed number of days, and you may terminate within seven days after you receive them with your earnest money refunded. The certificate works the same way: delivered at the seller's expense, prepared within the prior three months, and you may terminate within seven days of receiving it. Your rights under Section 82.156 of the Property Code are preserved either way.
Three things follow from that, and they are the reason this section exists.
Seven days is not long to read a declaration, a set of bylaws, the rules, a budget, a reserve study and a certificate. Ask for all of it the day the contract is executed, not when the seller's deadline arrives. The clock starts on receipt, and a seller who delivers on the last permitted day has compressed your review without doing anything improper.
The termination clock and your option period are not the same clock. People conflate them constantly and discover the difference at the worst moment.
And the clock is tied to receipt, so the delivery date is worth documenting in writing. If it ever matters, it will matter a great deal.
The right of first refusal almost nobody reads
If the governing documents contain a right of first refusal, the contract's effective date does not begin until you receive the association's certification that the seller complied with it and that everyone entitled to exercise the right has declined or waived it. If that certification does not arrive within the agreed number of days, or if someone exercises the right, the contract terminates and your earnest money is refunded.
Nothing is lost except your time, your inspection fees and the house you thought you were buying. In a small building this is a live possibility rather than a formality, and it is disclosed in the resale certificate under transfer restrictions. I check for it before you spend anything.
Assessments, reserves and who pays what at closing
Three allocations on the standard contract are worth knowing before you negotiate rather than after.
Regular assessments are prorated through closing in the ordinary way. The association's accumulated cash reserves are not credited to the seller, which is the correct result but surprises sellers who think of the reserve balance as partly theirs. And a special assessment that is unpaid at closing is the seller's obligation under the form. That last one is why the timing of a board vote matters so much, and why I ask for recent board meeting minutes rather than relying on the certificate alone. A certificate reports what has been approved. Minutes show you what is being discussed.
Transfer fees charged by the association are capped at an agreed figure with the seller covering any excess, so leaving that blank unconsidered is a small unforced error.
What about buying with cash?
Paying cash removes your financing risk. It does not remove the project risk, it transfers it to you.
If the project cannot be financed, your buyer pool when you sell is limited to people who also do not need a loan. That is a materially smaller pool, and it shows up as a longer marketing period and a weaker position. Cash buyers in condominiums should run the project review their lender would have run, for exactly the reason a lender runs it. I order the same association documents and ask the same questions whether or not there is a loan involved.
What I check before you waive anything
On any attached property, in this order: what the deed conveys and which chapter of the Property Code governs; whether a right of first refusal exists; the declaration's leasing provisions, including any cap, minimum term or waiting period, which matter even if you never intend to rent; the budget and the reserve allocation, read against what the project will need; approved capital expenditures and the last several sets of board minutes; litigation and delinquency; the master insurance policy and what it leaves to your own unit policy; and the association's responsiveness to the lender questionnaire, which is a signal in itself.
If you are weighing a high-rise residence against a house, the way the upper tier of Dallas-Fort Worth divides is a useful companion read, and the HOA, MUD and PID guide covers the assessment layers that sit outside the association entirely. If you are relocating and not yet sure which submarket you want, leasing first is frequently the better decision.
Frequently asked questions
Is a townhome the same as a condominium in Texas?
Not necessarily. Townhome describes a shape, not a form of ownership. A fee-simple townhome conveys the structure and the ground under it and sits in a property owners association under Chapter 209 of the Texas Property Code. A condominium conveys a defined airspace plus an undivided interest in the common elements and falls under Chapter 82. The recorded declaration is what settles it, and the distinction changes both the disclosures you receive and how the property is financed.
Why would a lender decline a condo loan when my credit is strong?
Because the lender underwrites the project as well as the borrower. Reserve funding, insurance, litigation, assessment delinquency, owner-occupancy and unfinished repairs affecting safety or structure are all evaluated at the project level. If the project fails those tests, the loan fails for every buyer in the building regardless of individual qualifications.
What changed about condo financing in 2026?
Limited Review was retired for loan applications dated on or after August 3, 2026, so established projects now require a Full Review or an applicable waiver. The minimum replacement reserve allocation for Full Review loans increases for applications dated on or after January 4, 2027. A project review waiver became available for projects with ten or fewer units. The investment-property concentration limit for established projects was retired, while the presale requirement remained.
What is a non-warrantable condo?
It is a project that does not meet agency project standards, so conventional financing is unavailable for units in it. Common causes are unfinished critical repairs, a failed or missing mandatory inspection, inadequate reserves, pending litigation, high assessment delinquency, insufficient master insurance, or an association that will not complete the lender's questionnaire. Buyers then need a portfolio lender or cash, which narrows the resale pool.
What must a Texas condominium resale certificate disclose?
Transfer restrictions including any right of first refusal, current assessments and unpaid amounts owed by the seller, capital expenditures approved for the coming year and reserve amounts, unsatisfied judgments and pending suits, insurance coverage, known alterations that violate the documents, health or building code notices received, remaining lease terms, the managing agent's contact details, and transfer fees. It must be prepared no earlier than three months before delivery.
How long do I have to cancel after receiving condominium documents?
Under the TREC Residential Condominium Contract you may terminate within seven days after you receive the declaration, bylaws and rules, and within seven days after you receive the resale certificate, with earnest money refunded in each case. Those clocks run from receipt and are separate from the option period, which is where buyers most often get caught.
Who pays a special assessment levied before closing?
Under the standard contract a special assessment that is unpaid at closing is the seller's obligation, and the association's accumulated cash reserves are not credited to the seller. Because a certificate reports only what has already been approved, I also read recent board meeting minutes, which show what is being discussed before it becomes a vote.
Should I still review the association if I am paying cash?
Yes. Cash removes your financing risk but transfers the project risk to you. If the project cannot be financed, your eventual buyer pool is limited to people who also do not need a loan, which means a longer marketing period and a weaker position when you sell. I run the same document review either way.
Where to go next
If you are relocating, start with the Dallas relocation guide and the first ninety days. If you are evaluating an attached property as an investment, the investment pages and the single-family rental guide cover the leasing side, and the leasing restrictions in a condominium declaration are the first thing to check before you model anything. General buyer resources are on the buyers page, and my designations and certifications are listed in full.
Tell me the building
Send me the address or the project name, your target closing date, and whether you are financing or paying cash. I will tell you what I already know about the project, order the declaration and the resale certificate, and get the lender questionnaire moving before your option period starts running rather than after. If the project has a problem, the time to find it is now.
Nitin Gupta, Broker Associate, Competitive Edge Realty. Call or text 469-269-6541 or email nitin@nitinguptadfw.com. Read client reviews or get in touch.
