Why condos are different now
After a condo building in Surfside, near Miami, collapsed in 2021, condo rules changed at both the state and federal level. Florida now requires milestone structural inspections and a structural integrity reserve study (SIRS) for buildings three stories or higher, and Fannie Mae and Freddie Mac tightened what they'll lend on. A lot of associations weren't properly funding their reserves, and now owners are paying to catch up through higher dues and special assessments.
The building gets approved, not just you
With a condo, the lender looks at the whole building, not just you. The association fills out a questionnaire covering the budget, reserves, insurance, lawsuits and any critical repairs. If the building has major repairs that haven't been done or the reserves aren't there, it may not be financeable with a conventional loan.
What if the building doesn't qualify?
A condo that doesn't meet Fannie Mae and Freddie Mac guidelines is called non-warrantable. That can happen because of low reserves, pending litigation, short-term rentals, too much commercial space, or one investor owning too many units.
Most banks and big-name lenders can't finance these at all, so buyers get told no and move on.
I offer non-QM loans that can finance a lot of these buildings. They need a higher credit score, a bigger down payment and usually a higher rate than a typical conventional loan. Get pre-approved first and we'll know your options before you find the right place.
Using FHA or VA?
FHA and VA require the whole condo project to be approved, and very few in Brevard are. Get pre-approved with me first so we know which buildings work for your loan before you start looking.
Look at the budget
The budget tells you how healthy the building is. Right now Fannie Mae and Freddie Mac want at least 10% of the association's budget going to reserves. For applications starting January 4, 2027, that goes up to 15%. Some buildings will raise dues to get there. Some won't, and they'll be harder to finance.
Why it matters for value
This isn't just about getting your loan. It's about selling later. If a building doesn't meet lender requirements, most buyers can't get a mortgage there, and you're left with cash buyers. Fewer buyers means lower prices and longer time on the market.
A lot of associations took out loans to catch up on repairs and reserves, and they're paying them back through higher HOA dues. Higher dues hold values down while the loan is being paid. Once it's paid off, dues can come back down and values can recover. The catch is that many of these buildings only caught up to 10%, not 15%, so they may be raising dues again just as the loan is paid off.
Buildings with healthy reserves and no association debt are easier to finance, easier to sell, and hold their value better.
Questions to ask
- Has the building done its milestone inspection and SIRS?
- Are there any special assessments now or coming?
- Does the association have a loan, and when is it paid off?
- How much of the budget goes to reserves, and will it hit 15%?
- Have dues gone up recently, or are increases planned?
Get pre-approved first
I've been doing this in Brevard for over 10 years. Get pre-approved with me before you start shopping, and I'll work with you and your Realtor to make sure the building you pick is one we can finance.