Buying a Condo in New Orleans

Where the condo inventory actually is

New Orleans condominium stock falls into a few distinct groups, and they behave very differently. The Warehouse District and Central Business District hold conversions of nineteenth and early twentieth century commercial buildings, often with high ceilings, large windows, elevators and amenity space, and often with the maintenance profile of an old commercial building. The Lower Garden District and parts of the Garden District have smaller conversions carved out of large historic houses, sometimes only four to eight units, which means a very small association carrying the cost of a very old building.

Purpose-built condominium and townhome developments cluster more heavily in Metairie and along the lakefront, and they generally offer newer systems, parking and lower per-unit exposure to a single big repair. Lakefront and mid-rise buildings bring elevators, structural envelope and sometimes pools into the association’s maintenance obligation.

The smaller the association, the more each owner’s share of a roof or a foundation repair costs. A four-unit conversion in a hundred-year-old building is a fundamentally different financial proposition from a hundred-unit development, even at the same list price.

The documents we insist on reading

Condominiums in Louisiana are governed by the Louisiana Condominium Act, and the association’s own recorded documents fill in the rest. Before your inspection period closes we want the recorded declaration and any amendments, the bylaws, the current operating budget, the most recent financial statements, the reserve balance and any reserve study, at least a year of board meeting minutes, the master insurance policy declarations page, and written confirmation of any pending or contemplated special assessment and any litigation involving the association.

The minutes are the document buyers skip and the one that tells the truth. Budgets present intentions. Minutes record the roof discussion that has been deferred for three years, the assessment the board is arguing about, and the owner disputes that will eventually cost money. If an association is slow or unwilling to produce these, we treat that as information about the association.

On the insurance side, the master policy tells you what the association covers and where your own unit-owner policy has to pick up. Get that boundary in writing, because the gap between the two is a common and expensive surprise after a storm.

Warrantable, non-warrantable, and why your loan can die

This is the part that costs deals. Conventional financing on a condominium requires the project itself to be acceptable to Fannie Mae or Freddie Mac, not just the borrower. A project that meets their criteria is described as warrantable. If it does not, the loan you were pre-approved for may simply not be available on that unit.

The usual disqualifiers are a high proportion of investor-owned rather than owner-occupied units, too much of the building in one owner’s hands, HOA dues delinquency above the allowed threshold, inadequate reserve funding, significant commercial space in the building, active litigation involving the association, and deferred maintenance or unresolved structural issues. Since the 2021 Surfside collapse, lender questionnaires ask directly about structural integrity, deferred maintenance and special assessments, and Fannie Mae maintains a list of projects it will not lend on. A building can land on that list without unit owners being told.

FHA works differently again, with its own approved condominium list plus a single-unit approval process for units in otherwise unapproved projects. Non-warrantable does not mean unfinanceable, but it typically means a portfolio loan at a higher rate with a larger down payment. What it always means is that we want your lender to review the project before we are deep into a contract, not after the appraisal.

Short-term rentals, and not assuming

If your plan involves renting the unit short term, two separate sets of rules both have to permit it. The City of New Orleans regulates short-term rentals, and those regulations have been revised repeatedly and litigated, so current requirements need to be confirmed with the city rather than inferred from what was true a couple of years ago or from what a listing implies.

Independently of city law, the association’s own declaration and bylaws can prohibit or restrict short-term rentals, cap the number of units that may be rented at all, or impose minimum lease terms. An association restriction applies whether or not the city would permit the use. We have seen buyers purchase on the assumption that a city license settles the question, and it does not. Both documents get checked, and the answer goes in writing before you are committed.