How to finance a non-warrantable condo in Florida

Short answer

A non-warrantable condo is financed with a non-QM or portfolio lender that does its own project review instead of Fannie Mae's; across our 100+ lenders that usually means 20% to 25% down (more for condotels), a higher rate than an agency loan, and the lender reading the HOA budget, reserve study, and inspection reports themselves. A condo is non-warrantable when the building fails Fannie Mae's project standards, for example reserves under 10% of the budget, more than 15% of units delinquent, hotel-style operation, or needed critical repairs. In Florida, the 2022 condo safety law added milestone inspections and structural integrity reserve studies, and buildings that have not completed them are failing agency review in large numbers.

What 'warrantable' means

A warrantable condo is one Fannie Mae or Freddie Mac will buy a loan on. Fannie Mae requires a project review for attached condo units (a Full Review through its Condo Project Manager, or a PERS review for new projects), and waives the review only for detached condos, projects of 2 to 10 units, certain limited cash-out refinances under 80% LTV, and a few other cases. If the project passes, your loan can be a normal conventional loan with as little as 3% down on a primary residence. If it fails, no agency lender will touch it, no matter how strong you are as a borrower.

FHA has its own list of approved projects plus a Single-Unit Approval path created in 2019. A building can be FHA-approved and not Fannie-warrantable, or the reverse, so we check both.

Why Florida condos fail the review

Fannie Mae's Selling Guide spells out the tests. The ones that catch Florida buildings most often:

• Reserves under 10%. The HOA budget must allocate at least 10% of assessment income to replacement reserves, or provide a compliant reserve study (B4-2.2-02).
• Delinquencies over 15%. No more than 15% of units can be 60-plus days past due on dues or special assessments.
• Critical repairs and deferred maintenance. Projects with significant deferred maintenance, failed mandatory inspections, evacuation orders, or unfunded repairs over $10,000 per unit due within 12 months are ineligible (B4-2.1-03). A special assessment for an unfinished critical repair also makes the project ineligible.
• Hotel or condotel operation. Front desk, rental pooling, owner-occupancy restrictions, or hotel licensing make the project ineligible.
• Commercial space over 35% of the project, or more than 10% of HOA income from non-incidental business.
• Single-entity ownership above 20% of units in a 21-plus-unit project (2 units in 5- to 20-unit projects).
• Litigation involving safety, structural soundness, or habitability.
• New construction and conversions that have not met pre-sale and conveyance requirements; see new construction condo loans.

SB 4-D: milestone inspections and SIRS

After the Surfside collapse, Florida passed Senate Bill 4-D in 2022 and amended it in 2023 and 2024. Two requirements now drive condo financing:

• Milestone inspection (Florida Statutes 553.899). Buildings three or more habitable stories must have a structural inspection by a licensed architect or engineer by December 31 of the year the building turns 30, and every 10 years after. Local agencies may require it at 25 years for buildings near salt water. Phase one is visual; if it finds substantial structural deterioration, phase two testing follows, and repairs must be scheduled within 365 days of the phase two report.
• Structural integrity reserve study (SIRS) (Florida Statutes 718.112(2)(g)). The same buildings must complete a reserve study of the roof, structure, fireproofing, plumbing, electrical, waterproofing and painting, windows and exterior doors, and any other item over $25,000 at least every 10 years. For associations existing on July 1, 2022, the first study was due December 31, 2025, and the statute says in no event may it be completed after December 31, 2026. For budgets adopted on or after December 31, 2024, owners may no longer vote to waive or reduce reserves for SIRS items.

Lenders now ask for the milestone report and the SIRS as part of the condo questionnaire. A building with a failed phase one, an incomplete SIRS, or an underfunded SIRS budget is usually non-warrantable until the work is done and funded. Dues and special assessments have risen across South Florida as a result, and lenders count them in your debt-to-income ratio.

How non-QM lenders finance these buildings

Non-QM and portfolio lenders are not bound by Fannie Mae's checklist. They read the same documents but set their own tolerances: a lender may accept reserves at 5%, delinquencies at 20%, or a building mid-way through its milestone repairs if the assessment is funded. In exchange they ask for more skin in the game. Typical terms across our lenders as of October 2026:

• Down payment: 20% to 25% on a primary residence or second home; 25% to 30% on investment units; 30% or more on condotels.
• Credit: 660 to 680 minimum at most lenders, better pricing above 720.
• Reserves: 6 to 12 months of payments.
• Documentation: full income, or bank statements and DSCR options for self-employed buyers and investors.
• Rates: higher than agency loans. Rates vary daily; call for today's pricing.

Condotels (buildings with a hotel program, front desk, or short-term rental pooling) are their own category with a smaller set of lenders. See condotel loans and non-warrantable condo loans.

Before you sign a contract on a Florida condo

Florida law gives condo buyers a right to review association documents, and your contract should include a financing contingency long enough for the lender's project review. Ask the listing agent or association for:

• the current budget and the last two years of financials,
• the most recent reserve study and the SIRS, or proof of the deadline extension,
• the milestone inspection report (phase one, and phase two if any),
• the delinquency report and any pending or approved special assessments,
• the condo questionnaire completed by the management company,
• rental rules, including minimum lease terms.

Send all of it to us before you offer. We can usually tell you in a day whether the building is warrantable, FHA-approved, financeable with a non-QM lender, or cash-only, and what down payment each path requires. See also our guide to condo down payments in Miami.

QMS Lending is an independent mortgage broker in Doral, FL (NMLS #1781090), founded in 2018, with access to 100+ lenders. All loans are subject to credit approval and program guidelines. Rates vary daily; call 305-425-1990 for today's pricing. Equal Housing Opportunity.