Florida Condo Mortgage Guide

Getting a Florida condo mortgage means the building has to pass before you do, and since 2021 far fewer buildings pass.

What lenders check on a Florida condo mortgage

• Warrantable or non-warrantable status, which decides your loan options
• FHA project approval, through HRAP or DELRAP, for FHA financing
• SB 4-D milestone inspections for buildings of three storeys and above at 25 years or older
• Reserve studies and structural integrity assessments
• The association’s budget, reserves, litigation and owner-occupancy ratio
• Delinquent dues across the association
• Insurance coverage on the master policy

The lender questionnaire is the real gate

Everything above reaches the lender through one document: a questionnaire the association completes. Its answers decide whether your loan proceeds, and a single line can end it.

A project usually becomes non-warrantable for one of a handful of reasons. More than 15% of owners are behind on dues. One person or entity owns too large a share of the units. Commercial space exceeds the permitted proportion. The association is in litigation over construction or structural defects. Reserves fall short of what the agencies now require. Any one of those is enough.

Therefore ask your agent to request the questionnaire and the association’s financials before your inspection period expires. That is the moment when walking away is still free.

Why Florida buildings keep failing this review

Two pressures arrived together after the Surfside collapse. Senate Bill 4-D required milestone inspections and properly funded structural reserves, ending the practice of waiving reserves each year to keep dues low. Meanwhile association insurance premiums rose steeply, and some boards cut coverage to compensate, which itself can fail a lender’s review.

The visible result is the special assessment. Concrete restoration assessments running from $50,000 to $200,000 or more per unit are now common in older coastal buildings. They matter to you in two ways. An assessment already levied is added to the monthly cost a lender uses to qualify you, and one that is pending but unfunded can make the project unwarrantable outright.

Ask for the last two years of board minutes. Boards discuss an assessment long before they vote on it, and the minutes are where you find out.

If the building will not qualify

You still have routes. Non-warrantable condo financing is available through portfolio and non-QM lenders, usually with a larger down payment and a higher rate. FHA single-unit approval can work where the wider project lacks approval. Conventional financing applies lighter rules than FHA and often succeeds where FHA cannot.

Investors buying a condo to rent should look at a DSCR loan, though remember the association dues sit inside that ratio.

Sources: Florida Statutes 553.899 and 718.112 on milestone inspections and structural integrity reserve studies, Fannie Mae and Freddie Mac project standards, and HUD condominium approval rules. You can check FHA project status on HUD’s condominium lookup.