Why Some Florida Condos Still Aren't Mortgage-Eligible in 2026 (And How to Check Early)

These risks often overlap with rising ownership costs outlined in The True Cost of Homeownership in South Florida, which is why condos that look affordable on paper can quickly become difficult to finance, especially for first-time buyers who often have limited down payment flexibility and are most vulnerable to unexpected special assessments.

What Non-Warrantable Condos in Florida Mean in 2026

A warrantable condo meets agency guidelines (Fannie Mae / Freddie Mac) and is usually easy to finance with standard loans.

A non-warrantable condo often has one or more of these problems:

• Underfunded reserves or budgets that ignore long-term repairs

• Large or recurring special assessments that strain owners

• Serious structural or safety issues flagged in inspections or SIRS

• Major litigation involving construction, safety, or finances

• Too many investor-owned units or late HOA payers

• Financials that don't meet agency rules after SB 154 and SIRS-era changes

Result:

• Fewer lenders will touch the building

• You may need larger down payments, higher rates, or specialty programs

• In some cases, only cash offers are viable

Understanding this upfront helps you avoid wasting time and money on inspections and appraisals in the wrong complex.

Top 5 Red Flags of Non-Warrantable Condos:

• Weak reserves

• Large assessments

• Structural issues

• Litigation

• High investor concentration

Thinking about a condo? Before spending on inspections, check if the building is warrantable. Start your pre-approval now and we can review both your profile and the building.

The Most Common Reasons Condos Fail Mortgage Guidelines

A. Weak Reserves and Non-Compliant Budgets

In the SB-154/SIRS era, lenders expect:

• Reserves that match the engineer's recommendations

• Regular contributions for roofs, structure, waterproofing, and major systems

• A budget that isn't held together by wishful thinking

Red flags:

• Tiny or missing reserve contributions in the budget

• No recent reserve study or SIRS

• Boards bragging about "low dues" in an older building with obvious wear

B. Big Special Assessments and Catch-Up Repairs

Assessments for:

• Concrete restoration, balconies, and parking decks

• Roof and waterproofing projects

• Code, life-safety, or elevator upgrades

These assessments are often triggered by the same financial and insurance pressures explained in Why Florida Home Insurance Is So High, and How Buyers Can Navigate It.

Lenders worry when:

• Assessments are large compared with the annual budget (often $10,000–$50,000+ per unit)

• Owners are already struggling to pay

• Structural work is unfunded or only half-planned

C. Structural / Safety Issues and SB 154 Requirements

Milestone inspections and SIRS can uncover:

• Spalling concrete, rebar corrosion, or failing balconies

• Garage, pool-deck, or column issues

• Waterproofing or foundation concerns

If reports show serious findings without a clear plan and funding, lenders see elevated risk.

D. Litigation, Delinquencies, and Investor Concentration

Other deal breakers:

• Open construction or structural litigation

• A high percentage of owners behind on dues

• One investor or entity owning many units

• Heavy short-term rental use that conflicts with rules or guidelines

Any one of these can move a building into the non-warrantable bucket.

Potential Costs for Non-Warrantable Buildings in South Florida:

• Special assessments: $5,000–$50,000+ per unit

• Larger down payments: +5–10% vs standard financing

• Limited lender options or cash-only requirement

Early Condo Eligibility Check Framework: How to Screen Buildings Before You Spend Money

You and your lender can run a quick "building health check" before you fall in love with a unit in Miami-Dade, Broward, or Palm Beach.

Step 1: Pre-Screen the Building

• Ask your agent: "Have other buyers needed cash or special financing here?"

• Look for MLS notes like "cash only," "non-warrantable," or "pending assessments."

Step 2: Pull Key Documents Early in the Contract Period

Ask your agent and lender to help you get:

1. Condo questionnaire (from lender to HOA/manager)

• This is the main underwriting tool for building approval.

• It covers reserves, delinquencies, investor concentration, litigation, and assessments.

2. Latest budget and financials

• Is there a meaningful reserve line item?

• Do income and expenses make sense for the size and age of the building?

3. Recent reserve study / SIRS or summary

• Has a SIRS or similar study been done?

• What major repairs are recommended and when?

• Is there a funding plan?

4. Assessment and litigation disclosures

• Any current or approved special assessments?

• How big, and over what schedule?

• Any open lawsuits related to construction, safety, or finances?

If the association resists providing these basics or answers questions vaguely, treat that as a warning.

For deeper background, pair this with Florida Condo Financing: Your 2025 Guide to SB 154, SIRS & Mortgage Approval.

Step 3: Decide with Numbers, Not Emotion

Ask yourself:

• Is this building likely to stay financeable for the next few years?

• Does the total monthly cost (mortgage + taxes + insurance + dues + assessments) still feel comfortable?

• If this exact building required cash or a large down payment in the future, would I still want to own here?

If the honest answer is "probably not," it's better to walk away early than to be forced into risky financing or a purchase you regret, especially for first-time buyers who often underestimate these risks, as outlined in 10 Mistakes First-Time Buyers Make in South Florida (And How to Avoid Them).

Questions to Ask Your Lender About Non-Warrantable Florida Condos (2026)

When you send a condo listing to your lender, ask:

• "Have you or your team closed loans in this building recently?"

• "Based on age, size, and location, do you expect warrantable or non-warrantable issues?"

• "If the building is non-warrantable, what are my fallback options, larger down payment, different program, or is it a hard 'no'?"

A good South Florida mortgage broker will:

• Flag buildings they already know are problematic

• Tell you whether issues are manageable (with the right product) or truly deal-breaking

• Help you compare a riskier building with a more stable one nearby, especially in competitive markets where buyers must also know how to compete with investors and cash offers in South Florida.

Ready to Vet Florida Condos Before You Fall in Love?

If you're shopping condos in Miami-Dade, Broward, or Palm Beach and want to know whether a building is truly financeable, we can help you check eligibility early, before you spend on inspections and appraisals.

• Get pre-approved in minutes: Start your application now so we can review both your profile and your target buildings.

• Explore condo-friendly programs: You don't need 20% down to buy a home in South Florida, even when condo financing feels restrictive.

• Book a strategy call: Schedule a call to walk through specific buildings, questionnaires, and non-warrantable risks before you offer.

EZ Funding Group, Inc. NMLS #349022 | Jaime Charouf NMLS #348964 | Equal Housing Lender