Condo Loans on Hold: How SB 326 Compliance Became a Lender Deal-Breaker in California
If you own a condo, or sit on your HOA’s board, you probably budget for repairs, reserves, and the occasional assessment. But thanks to California’s SB 326 balcony law, you may need to budget for something far bigger: lender compliance checks that can stall or sink a loan.
A recent Fox 40 / EIN Presswire report shows mortgage brokers across the state adding a new line item to their underwriting checklist: “Provide proof of SB 326 inspection.” Without it, deals are being delayed, downgraded, or denied outright.
Why Lenders Suddenly Care
SB326 requires every condominium association in California to inspect its Exterior Elevated Elements (EEEs)—balconies, decks, catwalks, exterior stairs—at least once every nine years and file a licensed engineer’s report with the city. Miss the inspection and you’re technically out of compliance with state safety law.
Lenders see that as a risk. No report? No loan.
It’s already impacting:
- Unit sales: buyers can’t close if the HOA can’t prove compliance.
- Cash-out refis: banks won’t fund large checks without current inspection docs.
- Rate-and-term refinances: even modest refis are flagged for missing reports.
- Insurance renewals: carriers are following suit, requiring the same paperwork.
What Banks Want to See
According to Truss Financial Group, many California lenders now insist on:
- An official SB 326 inspection report signed by a licensed engineer or architect.
- Documentation that all flagged repairs are complete—or at least scheduled with permits.
- Evidence the HOA has a reserve line item to fund ongoing balcony maintenance.
Fail any one of these tests and the bank can pause or kill the loan.
How to Get Compliant
No need to panic, but you do need to schedule an inspection—soon. Enforcement steps up in 2025, and the inspection backlog is already months long in some counties.
DrBalcony offers an inspection-only solution designed for HOAs:
- No repairs, no upsell: objective reports lenders trust.
- Rapid scheduling & turnaround: keep deals on track.
- Digital, city-ready reports: easy to upload to underwriting portals.
- 20 % Price-Beat Guarantee: show us a lower written quote and we’ll beat it.
- 4,000+ inspections completed statewide.
Don’t Let a Missing Report Kill Your Loan
Whether you plan to sell, refinance, or simply stay ahead of SB326 deadlines, book your inspection now—before it becomes a deal-breaker.
📞 Call 805-312-8508 for a free quote
🗓️ Schedule online: DrBalcony.com
Stay compliant. Keep your financing options open. Protect your property value—with DrBalcony.
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