When applying for loan approval for two condos in Leonia with the same budget, there were differing results. One was approved without issue, while the other required additional documentation and was ultimately approved conditionally. The personal credit score requirements for both complexes were the same. The difference lay in the financial status of the complexes themselves.

If you are preparing for a loan for the first time, this aspect may feel unfamiliar. While credit scores and income assessments are well-known, it is not widely understood that the building itself is also evaluated when purchasing a condo.

Leonia has a high proportion of single-family homes, so there are not many condo listings available. In such cases, it is more realistic to use the overall statistics for Bergen County as a benchmark. The median monthly maintenance fee for condos in Bergen County is $490, while the average in New Jersey is $423.

Due to the limited number of listings, opportunities to compare two properties at the same time are rare. Therefore, it becomes increasingly important to carefully examine the maintenance fees and financial status when a property becomes available.

The reason lenders assess the complex rather than the individual is straightforward. Condo loans are tied to the financial status of the entire building, not just a specific unit. They comprehensively evaluate delinquency rates, reserve fund ratios, ongoing lawsuits, and the proportion of commercial space. If a complex does not meet the criteria, it may be classified as a non-warrantable condo, making loan conditions stricter or leading to denial.

Comparing the two complexes makes this difference clear. The complex that was easily approved had recently completed a reserve study, and its reserve ratio was progressing as planned. In contrast, the complex that was only conditionally approved had an outdated reserve study and a history of lawsuits.

The takeaway from this experience is clear. When selecting a property, do not just compare the maintenance fee numbers; it is advisable to ask the real estate agent or management company whether a recent reserve study has been conducted to reduce surprises after the contract.

If you are moving to Leonia from another state, you should also consider property taxes along with maintenance fees. New Jersey has relatively high property tax rates, so even if a complex has low maintenance fees, the total housing costs may be higher than your previous residence.

For families prioritizing school districts, it is helpful to refer to ratings from GreatSchools or Niche, but keep in mind that school district boundaries change frequently, so it is advisable to verify the assigned school based on the address of the property you are interested in.

New Jersey has recently undergone significant changes in this area. A law enacted in 2023 will take effect in January 2024, and a supplementary bill will be implemented in August 2025. Condos and co-ops must have a reserve study prepared by a qualified engineer or certified professional every five years, and they must manage their finances to ensure that the balance does not fall into the negative over a 30-year funding plan. Complexes that have not had a study in the last five years must complete their initial study by January 2025.

Once this law is established, it is expected that the number of complexes facing issues during loan assessments will decrease. However, since it is still in the early stages of implementation, compliance may vary by complex. Here are the items to check before signing a contract:

• Whether a recent reserve study has been conducted and its timing
• Compliance with reserve balance and 30-year funding plan
• Delinquency rates and ongoing lawsuits
• Rental restrictions and pet policies

If you are moving and settling in from Korea, these procedures may feel unfamiliar. Knowing in advance that condo loans involve separate assessments for individuals and complexes can help reduce unexpected delays during the contract process.

Rather than rushing to sign a contract based solely on maintenance fee numbers, it seems more efficient to first check the financial status of the complex before the loan stage. Especially in neighborhoods like Leonia, where there are fewer listings, it is easy to become anxious about missing out on a desirable unit, but it is safer not to skip the document verification process during such times. This article is not investment or legal advice, and it is recommended to consult with a professional before finalizing any contracts.