Non-Warrantable Condo Loans in Florida
Your lender ran the building and came back with a no. That is a statement about the building, not about you, and it is not the end of the deal. We finance condos that Fannie Mae and Freddie Mac will not touch — and we start looking at the building while you still have options, instead of after the appraisal.
Request a free building pre-review Start with the basicsWhat "non-warrantable" actually means
It is a label about the building, applied by an agency, on a particular day.
Fannie Mae and Freddie Mac publish project standards. A condo that meets them is warrantable, and a conventional loan on a unit inside it can be sold to the agencies. A condo that misses even one standard is non-warrantable, and that same conventional loan has nowhere to go.
Three things follow from that, and most buyers are told none of them.
- It is the building that failed, not the borrower. Credit, income and down payment had nothing to do with it. The strongest buyer in Florida gets the same answer in that building.
- One agency saying no is not the whole market saying no. Fannie and Freddie do not agree with each other on every point, FHA and VA keep separate approved lists, and portfolio lenders set their own rules. We check all of them. A single "no" is the beginning of the question.
- The label expires. Project approvals carry dates. A building can be approved in March and lapse in June because nobody re-filed the paperwork. That is a documentation problem wearing a structural problem's clothes.
If you are earlier in the process and still asking whether a building passes at all, start at our Florida condo loans page. This page is for what happens after the answer comes back no.
Why Florida buildings fail, in the order we actually see it
National articles list these alphabetically. This is the order that is actually driving South Florida buildings out of conventional financing right now — and it is not the order most people expect.
1. Reserve funding
The one moving fastest, and the one with a date on it. The budget has to put a minimum share toward reserves, and the plan has to cover capital items on their real life cycle — a twenty-year roof funded on a forty-year schedule is a finding. The standard rises in January 2027, and the vote that decides whether a building clears it happens at the fall budget meeting.
2. Critical repairs and deferred maintenance
The post-Surfside category. Open structural items, repairs identified and never closed out, and milestone inspections that were performed but never documented to anyone. A building is ineligible without the paperwork even when the association insists there were no findings.
3. The master insurance policy
The one almost nobody writes about. Wind deductibles, the new per-unit deductible cap, sublimits and pooled policies. It gets its own section below, because the detail is where the money is.
4. Litigation
Not all lawsuits are equal. A slip-and-fall covered by insurance is usually survivable. Litigation over structural defects is the one that closes every door, including ours.
5. Mandatory memberships and amenity ownership
Buildings where owners must join a club, and buildings where the association does not actually own its own amenities. Common in Palm Beach County golf communities and almost never mentioned anywhere. Together these account for a surprising share of the buildings we see flagged.
6. Concentration and delinquencies
Too many units held by one entity, too much commercial square footage, or too many owners behind on dues. Real, but well down the list in practice — and the March 2026 changes loosened the investor-ownership piece considerably.
The insurance certificate, and why nobody warns you about it
Reserves and repairs get talked about. Insurance does not — search this topic and you will find a dozen articles that say "master insurance" and stop there. There are four specific failures underneath it, and an association can be funding reserves properly, have a clean inspection, and still be caught by any one of them.
The wind deductible
Named-storm and hurricane deductibles have climbed. Agency rules cap what they will accept on a per-occurrence basis, and a great many Florida associations are now sitting above that cap. The building is insured. It is insured on terms the agencies will not buy a loan against. This one alone accounts for a large share of the non-warrantable buildings we see.
Sublimits against replacement cost
The policy has to insure to one hundred percent of replacement cost. What trips buildings up is a sublimit buried in the policy — a specific peril capped far below what the tower would actually cost to rebuild. We have looked at certificates showing coverage in the tens of millions against a replacement need in the hundreds of millions.
Pooled and group policies
Several associations sharing one policy under an aggregate limit. Add the replacement cost of all the buildings in the pool and compare it to the aggregate. The math usually does not work, and underwriting knows to check.
The per-unit deductible cap — new as of July 2026
Since July 1, 2026, a master policy carrying a per-unit deductible above $50,000 can push a project out of conventional eligibility. This is recent, it is catching associations that renewed without reading the number, and it is not yet in most of what is written about condo financing. If your building renewed this summer, this is the first thing to look at.
One thing that is not a problem, despite what you will read elsewhere: the roof does not have to be insured on a replacement cost basis. Fannie's guide carves roofs out of that requirement explicitly, and actual cash value on the roof is acceptable. If someone told you the roof valuation made your building non-warrantable, get a second read.
Why this matters to you specifically: an insurance problem is the most fixable item on this list, and it is the one most likely to be fixable on a portfolio loan instead. Some of these conditions are tolerated by a program the agencies do not run. Some can be solved by the association with a deductible buyback at the next renewal. Neither of those conversations happens if everybody accepts "non-warrantable" and walks away.
What changed in 2026, and what it means for your building
The rules moved in March. Roughly eight percent of previously ineligible projects came back into range. Small number, real buildings.
| What changed | What it means |
|---|---|
| Two-to-four unit condos | Most project-level review is waived. Commercial space and location questions largely fall away. The building still cannot be a condo-hotel and still has to clear insurance. |
| Five-to-ten unit condos | A materially lighter review than a full project. A lot of small Broward and Palm Beach buildings sit in this range and were being over-reviewed. |
| Florida new construction | The pre-review requirement came off. Outside vendors can complete the project report, which drops the fee and means a smaller lender can do the same work a national lender can. |
| Investor ownership | The old cap tying investor ownership to economic units is gone. Financing in heavily-rented buildings is meaningfully broader than it was a year ago. |
| Insurance deductibles | Policies above the per-occurrence cap may be brought into range with a buyback, where the market offers one. Availability varies building to building. |
The one moving the other direction
On January 4, 2027, the reserve funding standard for conventional condo project approval rises to fifteen percent of eligible operating expenses. Associations set that in the fall budget vote, which means the decision that determines a building's 2027 financing gets made this autumn — usually by people who do not know that is what they are voting on.
Run your association's number with our free reserve calculator →
How a non-warrantable condo loan is different
The loan does not go to Fannie or Freddie. It goes to a portfolio investor who writes their own project rules — and theirs are wider in the places Florida needs them to be.
| Where the building failed | How a portfolio program treats it |
|---|---|
| Insurance deductible above the agency cap | Frequently acceptable. This is the single biggest reason a Florida building that fails conventional still closes. |
| Commercial square footage | Tolerated to roughly half the building, against about a third on the agency side. Mixed-use on Las Olas, Federal Highway and Biscayne lives in this gap. |
| One entity owning a large block of units | Tolerated up to nearly half the project. Expect questions if that entity is actively selling the block down. |
| Owners behind on dues | Tolerated at roughly a quarter of the project, well past where conventional stops. |
| Structural defect litigation | Still ineligible. This is a hard stop on both sides. Anyone telling you otherwise has not read the file. |
One other thing worth knowing rather than worrying about: portfolio investors limit how much of any single project they will hold, and the Florida limit is tighter than the national one. It rarely comes up. It does come up in very small buildings, and if you are working several units in the same one it is worth a call before you get deep into a second or third contract.
What a non-warrantable loan costs
The honest answer is that it depends on the building, and anyone quoting you a number before they have read the association's documents is guessing.
What we can tell you is what moves the number. A portfolio investor is holding this loan rather than selling it, so they price for the risk they are keeping. Three things drive it:
- Which rule the building missed, and by how much. A deductible slightly over the agency cap prices very differently from a building with open structural findings.
- How much of the project the investor already holds. The first loan in a building and the last one available are not priced the same way.
- Occupancy. A primary residence, a second home and an investment property are three different conversations in the same building.
The range is wider than people assume in both directions. A strong borrower putting a substantial amount down on a building that missed by a technicality can land somewhere very close to conventional — sometimes close enough that it stops being part of the decision. A thin file on a building with real problems is a different conversation. Those are both normal outcomes and you cannot tell which one you are from the outside.
What we will not do is let you find out on the day the appraisal comes back. You will have real numbers before you are committed to anything.
And the cost is negotiable — just not with us
If the financing carries a premium, that premium is a number you can put to work in the offer. Sellers in non-warrantable buildings generally know their buyer pool is smaller, and a seller credit or a price adjustment that covers the difference is a normal conversation in those buildings — frequently an easier one than in a clean building down the street. Bring the number to the negotiation instead of absorbing it quietly. Your agent can only use it if they know it.
Compare it against the real alternative
The comparison most buyers make is non-warrantable financing against conventional financing, and by that measure it always looks expensive. That is the wrong comparison. The real alternative in a non-warrantable building is cash — which is why units in those buildings trade at a discount to the identical unit down the street. Price the discount against the financing cost before you decide the building is not worth it. Often the numbers land somewhere buyers do not expect.
What we do that a call center cannot
We start on the building before you write the offer
Free, and before anyone spends money. Send the building name and address and we will tell you what we can see. How complete that answer is depends on the building — sometimes it is same-day and definitive, sometimes it waits on documents only the association can produce.
We keep a South Florida building file
We track project status across the agencies, FHA, VA and the investor lists we have access to — including approval dates and expirations. When you ask about a building, we are often not starting from zero.
We check every list, not the first one
Fannie says no and Freddie says yes more often than people expect, and FHA and VA keep their own approvals. One decline is one data point.
We do the project review in-house
We are not waiting in a national lender's queue behind four hundred files in other states. In a market where the contract clock is short, that is frequently the whole difference.
We tell associations what to fix
A lot of non-warrantable buildings are two decisions away from being financeable. We will say which two, in writing, to a board that wants to hear it.
We tell you early when it is thin
Some buildings we can see are going to be difficult from the first look. You will hear that on the first call rather than three weeks in, along with what would have to change.
If you already own in a non-warrantable building
This is the part that costs owners real money, and most of them do not find out until they try to sell.
When a building goes non-warrantable, the pool of buyers who can finance a unit in it shrinks to the people who can pay cash or who find a portfolio lender. That shows up in the sale price of every unit in the building, including yours, whether or not you were at the meeting where it happened.
The path back is usually shorter than boards assume, because the most common causes are paperwork and insurance rather than concrete:
- Produce the inspection report. A completed milestone inspection nobody filed with anyone is a document problem. It is solved in an afternoon.
- Fix the insurance at renewal. Buy the deductible down, bring the per-unit deductible under the cap, remove the sublimit, get off the pooled policy.
- Close out the special assessment properly. Repairs tied to critical items have to be certified complete by a licensed contractor or a structural engineer. A property manager's email does not satisfy it, and that single substitution has held up more buildings than any actual construction defect.
- Fund reserves to standard before the 2027 date. Decided in the fall budget vote. Run your number here.
We will sit with a board and go through it. There is no cost and nobody has to take a loan out to have the conversation. A building that can be financed is worth more per unit than one that cannot, and that argument tends to carry a room better than anything a lender says about itself.
More on what the 2027 reserve deadline does to your building →
If you are the listing agent
Three things save deals in non-warrantable buildings, and all three happen before the listing goes live.
- Know the status before you price it. A non-warrantable building is a smaller buyer pool, and a smaller buyer pool is a pricing input. Finding out during the inspection period is finding out too late.
- Get the association documents up front. Budget and reserve study, the full master policy rather than the certificate, twelve to twenty-four months of minutes, and the milestone inspection if one has been done. Associations that resist this are the reason deals die.
- Ask about the building, not just the unit. If you are working more than one unit in the same small building, mention it early — occasionally the available financing is narrower for the second or third.
Non-warrantable condo financing — questions we actually get
My lender said the building is non-warrantable. Is the deal dead?
Why do so many Florida buildings fail on insurance rather than reserves?
Can more than one buyer in the same building use a non-warrantable loan?
Does a non-warrantable loan cost more than a conventional loan?
Can a building become warrantable again?
What will you need from the association?
How long does a building review take?
Send us the building
Name and address is enough to start. We will check it against the lists we have access to and tell you what we find, what we cannot see yet, and what it would take to get the rest. Some buildings we can answer the same day. Others depend on documents only the association holds, and part of the job is telling you which kind you are dealing with. No cost, and no obligation to use us for the loan.
The button opens an email to our condo desk with the questions already filled in. Answer what you can — nothing on it is required.
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NMLS Consumer Access: www.nmlsconsumeraccess.org
Licensed Florida Mortgage Lender. This page is general information about condominium project eligibility and is not a commitment to lend, an offer of credit, or legal, insurance or accounting advice. Loan approval is subject to underwriting, program eligibility, borrower qualification and project review. Project standards are set by Fannie Mae, Freddie Mac, FHA, VA and individual investors and are subject to change; confirm current requirements before relying on them. Association budget, insurance and reserve obligations are governed by your association's documents and applicable Florida law — consult your association's attorney, insurance agent and accountant. Not all borrowers or projects will qualify. Programs and terms subject to change without notice.
