The Unsellable Condo Crisis: What It Means for Idaho’s Real Estate Market

In March 2025, Newsweek published an article that quickly made waves in the real estate and HOA management communities: “Map Reveals Top 10 States With Most Unsellable Condos.” The piece shed light on a quietly growing concern that thousands of condominiums across the U.S. are now considered “unwarrantable” or ineligible for conventional financing through government-backed programs such as Fannie Mae and Freddie Mac. While the article focuses on states most affected—like Florida, California, and Nevada—the ripple effects are beginning to reach quieter, less saturated markets like Idaho.

This post is intended to provide context for Idaho homeowners, potential buyers, real estate professionals, and especially those involved in HOA and COA leadership. As President of PioneerWest Property Management, a company that has long served associations in the Wood River Valley and beyond, I’ve had a front-row seat to how national trends and federal lending standards influence local property values, association operations, and owner expectations.

Understanding “Unsellable” Condos

Let’s start by addressing what “unsellable” really means. It’s a dramatic term, often misunderstood. In this context, unsellable refers to condominiums that are not eligible for traditional financing through Fannie Mae or Freddie Mac. These agencies purchase mortgages from lenders, which allows lenders to free up capital and offer more loans. When a condo is deemed ineligible—also known as “unwarrantable”—it typically means that buyers cannot use these common financing options, limiting them to cash buyers or non-conventional loans with higher interest rates and stricter terms.

Why does this happen? Most often, it’s due to one or more of the following:

• Deferred maintenance and structural concerns

• Inadequate reserve funding

• High investor ownership or low owner-occupancy rates

• Pending litigation involving the HOA or developer

• Recent or repeated special assessments without transparency or planning

These criteria are not new, but after the tragic 2021 Surfside condominium collapse in Florida, Fannie Mae began to intensify its scrutiny. Since then, the number of “blacklisted” condo developments has grown rapidly—and quietly.

Idaho's Position in the National Conversation

While Idaho is not listed among the top 10 states with the most “unsellable” condos, that should not be taken as immunity from the problem. In fact, Idaho’s relatively smaller condo market and slower urban development cycle could make the impact more concentrated and, in some cases, more difficult to navigate.

The condo market in Idaho is most active in places like Boise, Coeur d’Alene, and the resort towns of the Wood River Valley, including Ketchum, Hailey, and Sun Valley. These communities see a mix of seasonal owners, retirees, remote workers, and investors—precisely the kind of ownership profiles that can draw scrutiny from underwriting departments.

Here are a few local realities that could push Idaho condos closer to the “unwarrantable” line if they aren’t addressed:

1. Aging Infrastructure Without Adequate Reserves

Many of Idaho’s condominium developments were built in the 1980s or early 2000s. While some have been well maintained, others are facing the consequences of deferred maintenance. Roofs, siding, decks, and foundations are reaching the end of their lifespans. Yet, it’s not uncommon to see HOAs with little or no money in their reserve accounts—or worse, no reserve study at all.

In Idaho, reserve studies are not currently required by law, and many smaller associations avoid commissioning them due to cost or unfamiliarity with the process. But without a reserve study and active reserve contributions, the association is setting itself up for special assessments or emergency repairs—red flags for lenders.

2. Special Assessments and Poor Communication

When capital needs arise and the HOA is underfunded, special assessments become the fallback. While they are sometimes necessary, their frequent use, lack of transparency, or absence of a broader financial plan can create unease among owners and underwriters alike.

HOAs and COAs in Idaho that lack proactive financial management may inadvertently make their properties less marketable. Lenders don’t just want to see that a special assessment exists—they want to understand why it was issued, how it’s being managed, and whether it’s a sign of systemic issues.

3. Increased Litigation Risk

We’re also seeing a rise in litigation between associations and owners, or associations and developers. In Idaho, construction defect claims are becoming more common as projects built during the post-recession boom (2012–2017) begin to reveal flaws. Even if claims are valid and well-managed, litigation is a clear deterrent for underwriters evaluating whether a condo is financeable.

What HOAs and COAs in Idaho Can Do Right Now

Idaho’s real estate landscape still presents tremendous opportunity for buyers and long-term investors. But associations need to act now to stay ahead of the growing scrutiny from lenders. Here’s a path forward:

1. Commission Reserve Studies and Update Them Regularly

Associations that operate without reserve studies are flying blind. A professional reserve study gives boards a roadmap for anticipated repairs and capital expenditures over the next 20–30 years. More importantly, it allows boards to justify assessments, explain budgets, and present transparency to lenders and buyers.

Even associations that are fully funded today should consider updating their reserve studies every 3–5 years, or sooner if major renovations or changes have occurred.

2. Develop Clear Maintenance Plans and Disclosure Protocols

Proactive maintenance schedules are no longer optional—they are a necessity for any association that hopes to remain compliant with financing requirements. Boards should have written policies in place for regular inspections, reporting structural concerns, and documenting completed repairs.

For associations managed by companies like PioneerWest, these protocols are built into annual operating reviews and project planning cycles. But self-managed communities or those with part-time volunteers often lack the time and resources to keep this organized.

3. Address Owner-Occupancy and Rental Restrictions

Fannie Mae generally requires that at least 50% of units in a condominium development be owner-occupied. For communities in resort or seasonal towns, this can be a challenge. Associations should regularly track owner-occupancy and consider updating their governing documents to strike a balance between protecting owner rights and maintaining eligibility for conventional financing.

4. Prepare Lender Questionnaires Thoughtfully

Condo lenders will usually request a questionnaire covering finances, reserves, insurance, maintenance plans, and pending litigation. This form is not just paperwork—it’s a gateway (or barrier) to lending. Associations that respond with vague answers, missing data, or incomplete insurance disclosures risk having the entire development blacklisted.

Management companies like ours now treat the lender questionnaire as a core part of our documentation protocols. But many smaller associations—particularly those without professional management—are not prepared to meet these requests effectively.

A Cautionary Note for Developers and New Construction

The concerns raised in Newsweek aren’t limited to aging buildings. New condo developments also face risk—especially if they are not transparent with their HOA budgets, construction standards, or governance models.

In Idaho’s booming areas, especially in Blaine, Ada, and Kootenai counties, developers should engage qualified reserve analysts and management professionals early in the project. Building a strong operational foundation not only prevents future litigation—it also protects the marketability of the units being sold today.

Impacts on Homeowners and Potential Buyers

Ultimately, it’s the individual homeowner who bears the brunt of this shift. When condos become “unsellable” in a lending context, it doesn’t mean they are worthless. But it does mean that buyers have fewer financing options, resulting in:

• Longer time on market

• Lower offers

• Appraisal challenges

• Decreased buyer pool

• Greater difficulty refinancing or taking out home equity loans

  
  

For current homeowners, this can affect personal financial planning, retirement timelines, and the ability to upgrade or downsize. For associations, the reputational harm can compound—particularly in small towns where word travels fast.

Where Idaho Goes from Here

So, is this a crisis in Idaho? Not yet. But it is a ticking clock for any condominium association operating without reserves, financial oversight, or structural maintenance plans.

At PioneerWest, we are actively working with our COA clients to ensure they’re not only in compliance with current expectations but also positioned to thrive in a shifting landscape. That means:

• Helping boards create multi-year maintenance and repair schedules

• Encouraging (and budgeting for) reserve studies and legal document reviews

• Supporting transparency through regular owner communication and financial updates

• Keeping records and documentation lender-ready at all times

Final Thoughts

The term “unsellable” might be sensationalist—but the risks behind it are very real. Idaho has an opportunity to be proactive, rather than reactive, by investing in the health and sustainability of its condo associations now.

It’s not just about compliance. It’s about protecting our homeowners, preserving generational wealth, and ensuring that our communities remain desirable, accessible, and financeable.

In an industry where perception and policy change quickly, the best defense is preparation. If you are a board member, homeowner, or buyer with questions about your condominium’s status or marketability, don’t wait for the problem to find you.

Start the conversation now.