Marin County HOAs – Recent Experiences with SB 326 and Condo Financing

Marin County HOAs – Recent Experiences with SB 326 and Condo Financing
July 2, 2026

We’ve recently encountered a recurring issue involving several homeowners associations in San Rafael and Novato related to California’s SB 326 requirements for the inspection and repair of elevated exterior elements, such as decks, balconies, and stairways.

In a number of associations, the required repairs have not yet been completed. As a result, these condominium and townhome communities have not met the eligibility requirements for conventional financing backed by Fannie Mae or Freddie Mac.

When an HOA is not approved, obtaining financing can take considerably longer than the standard loan contingency period for a property not requiring a condo approval. In Marin County, loan contingencies are typically 7 to 14 days, but we’ve experienced multiple transactions where additional time was required—not because of any fault by the buyer, seller, lender, or HOA, but simply due to the approval process.

In one transaction, we had to change from a lender using Fannie Mae guidelines to one using Freddie Mac guidelines in order to obtain financing approval for the property. In another case involving a San Rafael condominium complex, we were unable to secure either Fannie Mae or Freddie Mac approval. The buyer ultimately obtained financing through a mortgage broker offering a non-conforming loan product. Although the interest rate was higher, the transaction was successfully completed.

Cash purchases are not affected by these financing requirements. However, cash buyers should still carefully evaluate the financial health of the homeowners association, including its compliance with SB 326, reserve funding, and any deferred maintenance, as these factors can significantly affect the property’s long-term value and future ownership costs.

Also, keep in mind an association cannot have their condo approval with Fennie Mae or Freddie Mac and it be due to some other reason than SB326. Often times due to low reserve funds, litigation, or deffered maintanence. 

Properties that qualify as a PUD (planned unit development) largely do not require condo approval.

Additionally PUDs generally are not effected by SB326 where:

• Each homeowner owns the land and structure 

• The homeowner, not the HOA, is responsible for maintaining balconies, decks, or elevated exterior elements.