Federal bill would let FHA finance condo repairs and special assessments
Federal bill would let FHA finance condo repairs and special assessments
2026-09-09 · District of Columbia · Legislation · Pending — not yet law
A bill before Congress would let the Federal Housing Administration insure loans a condominium association takes out to repair its building, and let individual owners finance a special assessment through an FHA rehabilitation mortgage. For a District of Columbia building facing a seven-figure facade or structural assessment, that is the difference between owners borrowing at credit-card rates and borrowing at FHA rates.
H.R. 9569, the Making Condos Safer and Affordable Act of 2026, is not law. It was introduced on June 30, 2026 by Representative Debbie Wasserman Schultz of Florida with Representative María Elvira Salazar, referred to the House Committee on Financial Services, and has had no further action.1
What it would do
Two amendments to the National Housing Act.
Section 234 for associations. FHA's Section 234 programme covers condominium housing. The bill would allow FHA to insure condominium association rehabilitation loans — borrowing by the association itself, secured against its assessment stream, to fund common-element repair.
Section 203(k) for owners. FHA's 203(k) rehabilitation mortgage lets a borrower finance repairs alongside a purchase or refinance. The bill would expand it so an individual unit owner can finance a special assessment.
It is a Community Associations Institute federal advocacy priority for 2026.
Why the gap it targets is real
An association facing a large capital need has three options today, and each has a defect. A special assessment demands cash from owners who may not have it, and produces delinquency. A bank loan to the association is available but on commercial terms, typically shorter and dearer than mortgage financing, and small associations often cannot obtain one at all. Or the board defers the work, which is how buildings arrive at the condition that makes the assessment unaffordable in the first place.
A federally insured association rehabilitation loan would sit between the first two.
Why this matters more in the District than the sponsors probably intended
The bill is a Florida-driven measure, written in the aftermath of that state's milestone-inspection and structural-reserve mandates and the assessments they produced. The District has no equivalent statute. But it has three things that push in the same direction.
Energy-performance obligations with capital consequences. The District's building energy performance standards require covered buildings to hit a consumption target or make an alternative compliance payment measured against the whole building's square footage. Meeting the target means capital work. The first cycle closes at the end of 2026.
A secondary-market reserve floor arriving in 2027. The minimum reserve allocation rises to 15 percent of assessment income for loan applications from January 4, 2027, with the streamlined project review already retired — covered in our report on those changes. Buildings that cannot fund to that level face non-warrantability, which is its own financing crisis.
An ageing conversion stock. A large share of District condominiums are mid-century apartment buildings converted decades ago, now facing envelope, riser and garage work simultaneously.
Put together, the District has manufactured the same capital pressure Florida legislated, by a different route — and without the political attention that produced this bill.
What this information means for a board
Nothing yet. It is a referred bill with no committee action, and the base rate for such bills is low.
But it is worth knowing that the financing gap is recognised at the federal level, because it reframes a board's own planning. An association weighing whether to fund a major project by assessment or by borrowing should understand that the borrowing market for associations may improve, and that reserve funding remains the only route that does not depend on anyone's credit.
The related federal change that already happened
One piece of federal condominium financing law did move. The 21st Century ROAD to Housing Act became law on July 11, 2026, and it substantially raises FHA multifamily per-unit mortgage insurance limits across the National Housing Act sections covering rental housing, cooperatives and condominiums, indexing future limits to a construction-cost measure.
The statute is done; the implementation is not. HUD has to write the rules, and until it does the higher limits are a number on paper. That is the pending item, and it is a more likely near-term source of change than H.R. 9569.
What to watch next
A Financial Services Committee hearing or markup on H.R. 9569, and HUD's implementation of the ROAD to Housing Act's insurance limits. Neither is on a published schedule.
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