A Federal “Naughty List” is Making Some California Condo Sales Nearly Impossible (SF Chronicle March 23, 2025)

A recent San Francisco Chronicle article highlights a crucial issue for condo buyers and sellers: some California condo buildings are flagged in a federal database as ineligible for conventional financing. The reasons behind this vary—from structural problems to missing documentation—but the outcome is the same: many lenders won’t approve mortgages for these properties.

For buyers, this makes it essential to explore financing options early. For sellers, ensuring that their building meets all necessary criteria before listing can help avoid delays and complications down the line. A bit of proactive research can go a long way.

This is just one piece of the puzzle. Other factors can also affect the sale of a condo, such as the number of units being rented out, the presence of any ongoing litigation, or compliance with laws like California's balcony safety regulations. These considerations can influence both financing and marketability, making it all the more important to do thorough due diligence before moving forward with a condo purchase or sale.

Read more about the “Naughty List” here.