Why might two Myrtle Beach condos listed at the same price get very different results from a conventional mortgage lender? The homeowners association's budget, its reserve fund and its master insurance policy now play a bigger part in that answer than the unit itself.
Since August 3, 2026, those documents have carried more weight in condo lending than they did a year ago. The timing matters, because the local numbers for condos and single-family homes have been heading in different directions all year.
Two Segments, One Summer, Opposite Results
The Coastal Carolinas Association of REALTORS® publishes monthly figures for the Myrtle Beach ZIP codes 29572 and 29577. Its most recent Local Market Update covers August 2026 and shows the split clearly.
| August 2026, Myrtle Beach ZIPs | Single-family | Townhouse/condo |
|---|---|---|
| Median sales price | $550,000, up 6.8% | $199,000, down 11.5% |
| Closed sales | 51, down 1.9% | 120, down 13.0% |
| New listings | 96, up 6.7% | 286, up 8.3% |
| Inventory | 322, up 14.6% | 1,469, up 4.0% |
| Days on market | 98 | 125 |
| Percent of list price received | 96.5% | 95.5% |
The year-to-date figures point the same way. Through August 2026, the townhouse/condo median was $207,000, down 10.0% from the same period in 2025, while the single-family median was essentially flat at $530,000.
Some of the condo numbers point in odd directions. Condos that did sell in August 2026 took 125 days on average, down from 166 days a year earlier. Closings still fell 13%. A segment where sold units move faster but fewer deals close is consistent with buyers sorting buildings into ones that work and ones that don't.
A few cautions. CCAR combines townhouses and condos in this series and doesn't separate oceanfront towers from inland complexes. One month of 120 townhouse/condo closings and 51 single-family closings is a small sample, and the report itself notes that small samples can make percent changes look extreme. The softening also started before this year. WPDE reported in August 2025 that the condo segment was cooling after pandemic-era rental-rate growth.
Rental demand doesn't explain the drop either. AirDNA's Myrtle Beach data through September 2026 shows the average daily rate up 8.0% to $280 and occupancy up 0.7% to 55%. Those figures cover the whole market, not condos alone, but they don't describe a collapse in demand. That leaves the question of what has changed for condos specifically.
What Changed for Condo Loans on August 3
In March 2026, Fannie Mae issued Lender Letter LL-2026-03, which retired the "Limited Review" process for established condo projects. Limited Review was the lighter look many lenders used for older buildings. For loan applications dated on or after August 3, 2026, those buildings must go through a Full Review or qualify for a waiver. Freddie Mac retired its own version, called Streamlined Review, for applications received on or after the same date, according to its Bulletin 2026-C. Fannie Mae's August 5 Selling Guide update incorporated the letter.
Fannie Mae explained the reason in the letter. It wrote that it had seen "a correlation between condo projects with underfunded reserves for capital expenditures and those in need of critical repairs," and that owners in those buildings "can experience substantial financial hardship from unexpected special assessments or higher regular assessments or dues."
The reserve rules got stricter on the same date. When a building's budget falls short and a lender relies on a reserve study, the lender must now verify that the budget includes the highest reserve allocation the study recommends. The "baseline funding" method, which lets the reserve balance approach zero without falling below it, is no longer allowed. Freddie Mac adopted the same restriction from August 3.
That changes what a Myrtle Beach condo buyer is really buying. A building with healthy reserves and a fully funded budget offers financing that works the way most buyers expect. A building that leaned on a thin reserve study may now steer buyers toward cash or loans outside the conventional market. Either way, that difference shows up in who can make an offer and how many offers arrive.
Some Rules Loosened, and That Matters Here Too
The same lender letters relaxed several rules that matter in a resort market where many units are second homes or rentals:
- Fannie Mae retired its 50% investment-property concentration limit for investor loans in established projects reviewed under Full Review.
- Freddie Mac retired its 50% owner-occupancy requirement for established projects.
- Master policies no longer have to insure roofs on a replacement-cost basis, and the inflation-guard requirement is gone.
- For loan applications dated on or after July 1, 2026, the maximum per-unit deductible for required master-policy perils is $50,000.
Put together, the agencies stopped caring so much about how many owners rent their units and started caring more about whether the building can pay for its own upkeep. For a heavily rented Grand Strand complex, that trade can help or hurt depending on its finances.
One rule didn't change. Freddie Mac's August 2026 condo project fact sheet still lists "condominium hotel or similar type of transient housing" among ineligible project types, along with timeshares and projects in litigation. This is a long-standing rule, not a new one, but it carries extra weight along a resort-heavy coastline.
The Next Date Is January 4, 2027
Another change is already scheduled. For loan applications dated on or after January 4, 2027, Fannie Mae's Full Review raises the minimum reserve allocation from 10% to 15% of the building's annual budgeted assessment income. Freddie Mac set the same 15% minimum for the same date.
That's under three months from today. Associations set budgets ahead of the new year, so the budget a board adopts this fall may decide whether its building clears the bar in January. A buyer under contract this winter could be the first to find out.
What South Carolina Law Does and Doesn't Require
Florida's post-Surfside rules led many people to assume similar requirements exist up the coast. They don't. HOA Weekly's overview, updated September 29, 2026, says South Carolina has no condominium milestone or structural-inspection statute and no Florida-style structural reserve-study mandate.
Two 2026 bills would have moved in that direction. H. 5063 would have required five-year structural inspections, as a condition of insurance renewal, for buildings at least four stories or 49 feet tall, within three miles of the Atlantic coast and at least 15 years old. It was referred to the House Labor, Commerce and Industry Committee on January 29, 2026, and no further action is recorded. H. 5204 would have required a seller packet with the reserve study, reserve balance, recent financial statements and known upcoming assessments. It also stayed in House committee.
As a result, the closest thing to a reserve review a Myrtle Beach condo gets right now is the lender's project review, not a state requirement. South Carolina's Horizontal Property Act makes the council of co-owners responsible for insuring the property. Repair costs beyond insurance proceeds and reserves are treated as a common expense shared among owners. When reserves run thin, those costs fall on the owners.
Questions to Settle Before Comparing Two Condos
The August data shows a 1% gap in percent of list price received between condos and houses. Inside the condo segment, though, financing access varies building by building. A comparison that goes past the listing price usually covers:
- Whether your lender has reviewed the project under Full Review since August 3, and what it found.
- How much of the current budget goes to replacement reserves, and whether next year's budget reaches 15%.
- Whether a reserve study exists, and whether the budget funds its highest recommended amount.
- The master policy's per-unit deductible and its renewal date.
- Whether the building operates with hotel-style features that could classify it as transient housing.
- Its current FHA status, checked directly in HUD's condominium project search, since approvals change.
Quick Answers
Does a lower condo median mean condos are a bargain right now? Not necessarily. The August 2026 median of $199,000 combines every townhouse and condo in two ZIP codes, so it mixes buildings that finance easily with buildings that don't.
Do these changes affect cash buyers? The project review applies to loans sold to Fannie Mae and Freddie Mac. A cash purchase doesn't go through it. A future buyer who needs a mortgage will, though, which affects resale.
Did the investor rule change help rental-heavy buildings? It removed one obstacle. Fannie Mae retired its investor concentration limit for established projects under Full Review, while the reserve and budget tests got stricter.
Is there a state inspection requirement for older oceanfront towers? Not currently. H. 5063 proposed one for coastal buildings but never moved past committee.
If you're comparing Myrtle Beach condos and want to know which buildings will hold up to a lender's review before you write an offer, Robin Shomaker can help you collect the budget, reserve and insurance documents early and go through them with your lender. Let's Connect.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
