How do you finance a non-warrantable condo in Florida?
A non-warrantable condo can't be financed with a standard Fannie Mae or Freddie Mac loan, so buyers use portfolio or non-QM loans instead. Investors typically use a DSCR loan, which qualifies on the unit's rent. Self-employed owner-occupants often use bank statement loans. Expect a larger down payment, more reserves, and a closer look at the building.
What does "non-warrantable" mean?
"Warrantable" means a condo project meets Fannie Mae and Freddie Mac standards, so a lender can sell the loan to them. When a project fails those standards, it's non-warrantable. Conventional loans are off the table for every unit in the building, even a unit in perfect condition.
It's a financing label, not a safety rating. Plenty of non-warrantable buildings are well kept. They just miss a rule on reserves, insurance, repairs, litigation, or how the building is owned and used. Lenders who keep loans on their own books, instead of selling them, can still finance units in those buildings.
Why more Florida condos are non-warrantable in 2026
Two sets of rules are tightening at the same time: Fannie Mae and Freddie Mac's condo standards, and Florida's post-Surfside condo safety laws. These are the dates that matter.
March 18, 2026
Fannie Mae issued Lender Letter LL-2026-03, in alignment with Freddie Mac, updating condo project standards and insurance rules.
July 1, 2026
The maximum per-unit deductible on a building's master insurance policy became $50,000. When the master policy has a per-unit deductible, the buyer must carry a unit owner's (HO-6) policy that covers it.
August 3, 2026
Limited Review ended. Loans in established projects now need a Full Review, which looks at the association's budget, reserves, insurance, special assessments and repair needs, unless the project qualifies for a waiver.
December 31, 2026
Final Florida deadline for associations finishing their first Structural Integrity Reserve Study (SIRS) together with a milestone inspection due by that date. Most associations had to complete their SIRS by December 31, 2025.
January 4, 2027
Required reserve funding rises from 10% to 15% of the association's annual budgeted assessment income for Full Review loans. Buildings budgeting below that level will fail.
The most common reasons a Florida building fails
- Critical repairs without the money to fix them. If repairs to critical components such as the roof, foundation or load-bearing structure top $10,000 per unit and the association hasn't funded them, the project is ineligible.
- Reserves below the required level. Lenders now review the budget on every Full Review loan, and the bar rises to 15% in January 2027.
- Insurance that doesn't meet the rules. A master policy deductible above $50,000 per unit, coverage below replacement cost, or a missing required peril.
- Special assessments tied to critical repairs, especially when the work isn't finished yet.
- Pending litigation involving the association, depending on what the lawsuit is about.
- An "Unavailable" status in Fannie Mae's Condo Project Manager, the lookup lenders use. That status isn't public, which is why buyers often find out only after a contract falls apart.
Florida's own laws feed directly into the lender rules. Buildings three or more habitable stories tall need a milestone inspection at 30 years, or 25 where the local agency requires it, and phase 2 structural repairs must start within 365 days of the report. Since January 1, 2026, associations can no longer waive or cut the structural reserves their SIRS calls for, which is pushing dues and special assessments up across the state.
Which loan fits your situation?
| Your situation | Loan type | How you qualify |
|---|---|---|
| Buying or refinancing a rental unit | DSCR loan (business purpose) | The unit's rent compared to its payment, not your tax returns |
| Self-employed, buying a home to live in or a second home | Bank statement loan | 12 or 24 months of bank deposits instead of tax returns |
| Need to close fast, or the unit needs work first | Short-term bridge financing, then refinance | Mostly the property and your plan to exit the loan |
Availability depends on the lender, the building and your file. Non-warrantable financing usually means a larger down payment, more reserves and somewhat different pricing than a conventional loan, because the lender keeps the loan instead of selling it. All loans are subject to underwriting approval, and not every building can be financed. Some problems, like active structural failures or an evacuation order, stop most lenders.
What to check before you make an offer
- Get the building name and HOA contact from the listing agent before you write anything.
- Ask for the current budget and reserve study. Look at how much goes into reserves each year.
- Ask for the SIRS and milestone inspection reports if the building is three or more stories, plus any board minutes about repairs.
- Ask about the master insurance policy, including the per-unit deductible and when it renews.
- Ask about special assessments and lawsuits, both current and planned.
- Send it all to a loan originator who does non-warrantable loans before your inspection period ends, so financing doesn't collapse at the last minute.
Questions buyers ask
Is a non-warrantable condo unsafe?
Not necessarily. Non-warrantable is a lending label. A building can be in good shape and still fail on reserves, insurance terms, litigation or ownership mix. Always read the inspection reports either way.
Can I live in a non-warrantable condo, or is it only for investors?
You can live in one. Owner-occupants use portfolio or non-QM loans such as bank statement loans. DSCR loans are for investment property only.
Does a DSCR lender care that the building is non-warrantable?
Many DSCR lenders don't apply Fannie Mae and Freddie Mac project rules, because they keep the loans themselves. They still review the building, and serious structural or legal problems can stop a deal.
Can a building become warrantable again?
Yes. Once repairs are finished, reserves are funded or insurance is fixed, a project can pass review again. Owners who finance now with a non-QM loan can sometimes refinance into conventional later.
Is there a public list of non-warrantable Florida condos?
No. Fannie Mae's project status lives in a lender-only tool, and a building's status can change after each review. The reliable way to know is to have a lender review the specific building.
Sources
- Fannie Mae Lender Letter LL-2026-03, March 18, 2026
- Florida DBPR, Milestone Inspections and SIRS
- Florida Statutes 553.899 (milestone inspections) and 718.112 (association budgets and reserves)
Send the building. Get a real answer.
Tell us the building and the numbers. If the deal doesn't work, we'll say so and tell you why.