If two Myrtle Beach condos list at the same price, with the same view and the same square footage, can one of them be harder to buy than the other? Since August 3, 2026, it can, and the reason has nothing to do with the buyer.
On that date, Fannie Mae retired its Limited Review process for established condo projects. Any conventional loan application dated August 3 or later on one of those buildings now goes through Full Review, or a waiver where one applies. In a Full Review, the lender looks at the homeowners association as closely as it looks at you. Its budget, its reserves and its master insurance policy all count. A building that fails can't get conventional financing, for any buyer.
That matters for anyone comparing condos here this fall, because the price on the listing now reflects more than the unit.
The numbers that started the conversation
The median price for Myrtle Beach townhouses and condos fell in both August and September, and September's drop was the steeper one. Here is what the Coastal Carolinas Association of REALTORS® reported in its September 2026 Local Market Update, with data current as of October 10, 2026, for Myrtle Beach ZIP codes 29572 and 29577:
| Townhouse/Condo, Myrtle Beach | September 2025 | September 2026 | Change |
|---|---|---|---|
| Closed sales | 143 | 102 | -28.7% |
| Median sales price | $238,000 | $177,450 | -25.4% |
| Percent of list price received | 95.3% | 94.2% | -1.2% |
| Days on market until sale | 167 | 136 | -18.6% |
| Inventory | 1,412 | 1,470 | +4.1% |
From January through September 2026, the townhouse/condo median was $205,000, down 10.9% from the same stretch of 2025. Single-family homes in the same ZIP codes barely moved over that period, with a median of $522,500, down 1.4%. August had already pointed the same way, when the townhouse/condo median came in at $199,000, down 11.5% from a year earlier.
Read these numbers with some care. CCAR counts townhouses and condos together, so the figures aren't oceanfront-only, and the report itself warns that small samples can make percent changes look extreme. A median also moves when the mix of what sells changes. Days on market fell even as the median dropped, which fits a month in which more lower-priced units closed. Still, the year-to-date numbers show a gap between the townhouse/condo category and single-family homes, and something is driving it.
Part of the slide began before the rules changed
Some of the cooling came first. In August 2025, WPDE interviewed Chris Ward, broker in charge at Beach Connection Realty and owner of Eagle Beach Rentals. He tied the condo market to investment demand and to the end of a rental-rate spike:
"Our rental rates spiked during COVID, like 2022, 2023, and we are starting to see that high demand come down a little bit."
He also told WPDE that some owners had figured out what upkeep really costs, or no longer wanted to hold the investment. That explains the softer demand, but it doesn't explain why the friction got sharper in 2026. The financing rules help explain that.
A condo loan has two borrowers, and one of them is the building
Every condo mortgage needs two approvals. One is for the buyer. The other is for the project. A building that meets the agency standards is called "warrantable" and can be financed with a conventional loan. Under Limited Review, a buyer who put enough money down could skip most of the questions about the building. Under Full Review, the lender collects the HOA budget, the reserve study, the master insurance policy, the delinquency report and a long project questionnaire. That's how Travis Buis, a Grand Strand loan officer, explained it in an August 2026 article on Myrtle Beach condo financing. He also wrote that Freddie Mac made a matching change to its own streamlined process.
Fannie Mae's Lender Letter LL-2026-03 tightened more than the review process. Lenders using a reserve study to show a building's reserves are adequate must now confirm that the budget funds the study's highest recommended allocation. They can no longer use the baseline method, which lets the reserve balance get close to zero without going below it. That rule was mandatory for applications dated on or after August 3, 2026.
Buis listed the building-level tests that can sink a deal however strong the buyer is:
- Reserves. At least 10% of budgeted assessment income goes to reserves today, and that rises in January.
- Delinquencies. Too many owners 60 or more days behind on dues, with 15% of units as the standard threshold he cites.
- Litigation. Lawsuits against the HOA over structural defects, life-safety issues, or claims larger than the insurance coverage.
- Insurance. Master coverage that falls short, or a per-unit deductible over the cap.
- Commercial space. More non-residential square footage than allowed, which can matter in oceanfront buildings with ground-floor retail or restaurants.
- Deferred maintenance and special assessments. Unfinished structural or safety repairs, especially on balconies.
His bluntest line will be familiar to anyone who has watched a condo deal fall apart: "a 780 credit score and a large down payment will not fix a building that fails these tests."
Why the Grand Strand feels this more than most markets
Condos make up a large share of what sells along the Strand, and many of the buildings share traits that Full Review looks at closely. Buis names heavy rental and investor ownership, large wind and hail deductibles on master policies, reserves kept lean so monthly dues stay attractive, and constant balcony, roof and stucco work from decades of salt air.
The insurance piece has a hard number. Starting with loan applications on or after July 1, 2026, Fannie Mae caps the master-policy deductible at $50,000 per unit for required perils. A building with a bigger wind deductible has a project problem, however good the unit looks.
Some resort product sits outside conventional lending altogether. Fannie Mae's Selling Guide treats projects run as hotels, motels or transient housing as ineligible. Its tests include mandatory rental pooling, revenue sharing and hotel-style services. A project is also ineligible if its legal or common name contains "hotel," "motel" or "resort," unless the word refers to a past use of the building rather than how it operates now. Simply being located in a resort area, or having 75% or more of units owned as investment properties or second homes, is treated as a red flag that calls for extra review rather than an automatic disqualifier. Freddie Mac's Guide also lists condo hotels as ineligible. It treats projects needing critical repairs as ineligible until the work and the engineering documentation are complete.
According to Buis, buyers in a building that fails often move to portfolio loans, DSCR loans or cash, and the pool of possible resale buyers gets smaller. This is where the rules meet the price. When fewer buyers can finance a unit, fewer of them can bid on it, and listing prices tend to move toward what that smaller group will pay.
The rules also loosened, which is why each building matters
The same letter made some things easier. Fannie Mae dropped the 50% limit on investor-owned units for established projects under Full Review. In a beach market full of rental owners, that's a real opening. It also expanded the Waiver of Project Review to new and established projects with ten or fewer units, effective right away.
The overall effect is uneven. A small building or one with healthy reserves may be easier to finance than it was a year ago. A large oceanfront tower with lean reserves and a big wind deductible may be harder. That gap between buildings is easy to miss in the citywide median, but it can decide a sale.
The next date on the calendar
| Date | What takes effect |
|---|---|
| July 1, 2026 | $50,000 maximum per-unit master-policy deductible for required perils |
| August 3, 2026 | Limited Review retired; highest recommended reserve-study allocation required; baseline funding no longer allowed |
| January 4, 2027 | Minimum reserve allocation under Full Review rises from 10% to 15% of annual budgeted assessment income |
The January change is less than three months away. Buis puts it simply: a building putting 11% of assessments into reserves passes today and fails in January unless the board amends the budget or raises dues. If you're buying this fall, ask how the HOA plans to meet the 15% threshold. That bears directly on next year's dues and on whether your eventual buyer can get a loan.
Statehouse proposals sometimes come up in these conversations too. South Carolina H.5063 proposed structural inspections every five years for older coastal buildings of four or more stories. H.5204 proposed reserve-study disclosures, fully funded reserves and member approval of special assessments. Both bill histories show only introduction and referral to the House Labor, Commerce and Industry Committee. They are proposals, not requirements.
Quick answers
Does my contract date decide which rules apply?
According to Buis, the loan application date governs, not the contract date or the closing date. Confirm the timing with your lender.
Is North Myrtle Beach seeing the same thing?
It's softer but less steep. CCAR's September 2026 update shows a North Myrtle Beach townhouse/condo median of $280,000, down 13.8% year over year, with 75 closed sales and inventory of 637, up 8.3%.
Is a cheaper condo a better deal?
It might be. A lower price can also reflect a building that fewer buyers can finance, which affects you again when you sell. Look at the HOA's budget, reserve study and master policy alongside the price.
This post is general information, not legal, financial or lending advice. Your lender, the HOA and the right licensed professionals can confirm how these rules apply to a specific building and loan.
If you're weighing Myrtle Beach condos this fall, I'm happy to help you pull together each building's HOA documents early, before the price becomes the only thing you've compared. Reach out to Alexandria Bevier and we can go through them together. Let's Connect.
