A non-warrantable condo is a building that Fannie Mae and Freddie Mac will not back a loan on, for reasons that usually have nothing to do with you. Low reserves, one investor owning too many units, pending litigation, or an insurance gap can all do it. I shop 160+ wholesale lenders, including portfolio and non-QM shops that hold these loans themselves, and some HELOC lenders that skip the full warrantability review. If it fits, I find the way.
Warrantable just means Fannie Mae or Freddie Mac will buy a loan on that building. When a project fails their checklist, every unit in it loses access to a conventional loan, even if your credit and income are perfect. In Florida in 2026, more buildings are landing on that list every month. Here is the checklist, in plain language, and the reasons I see most.
Fannie and Freddie want to see the association's reserve fund holding roughly ten percent or more of the annual budget, and that bar is stepping up toward fifteen percent for applications dated in early 2027. Florida's new Structural Integrity Reserve Study law is forcing associations to fund reserves for roof, structure, plumbing, electrical, waterproofing, and windows starting this year, and a lot of older buildings simply were not saving enough. That gap alone is enough to flag a project.
A lawsuit against the association, whether it is over construction defects, a slip and fall, or a fight with the developer, is one of the fastest ways a building gets flagged. It does not matter if the association is right. The exposure alone is the problem.
Any Florida building three stories or taller has to pass a milestone structural inspection at 30 years, or 25 years if it sits within three miles of the coast, and every ten years after that. If that inspection turns up open structural deficiencies, or the required Structural Integrity Reserve Study flags major work that has not been addressed, the project is not warrantable until it is resolved.
If roughly fifteen percent or more of units are 60 or more days late on HOA payments, that tells the GSEs the association may not have the cash flow to operate or maintain the property. It is one of the more common flags in buildings that also have high investor turnover.
In a building of 21 units or more, if a single entity, one investor, an LLC, the developer, owns more than about twenty percent of the units, the project fails the single-entity ownership test. It is common in smaller condo-hotels and newer buildings that have not fully sold out.
Florida's property insurance market has been brutal on condo associations. If the master policy is not covering the building at full replacement cost, or the per-unit deductible runs too high, that fails the insurance test. This is one of the fastest-growing reasons I see buildings drop off the eligible list.
New construction and conversions generally need to have at least half their units under contract or closed before the GSEs will touch them. A slow-selling new building can stay non-warrantable for a while simply on that basis.
Commercial space over roughly thirty five percent of the project, or a building that operates with hotel-style rentals, front desk check-in, and short-term stays, does not fit the standard condo definition at all. Some of these never qualify for conventional financing, warrantable or not.
I do not want you three weeks into a contract before we learn the building is a problem. I start checking the day you tell me an address.
This is the same form (Fannie's 1076 or Freddie's 476) that any lender would eventually need. I request it directly from the management company or association as soon as I know the building. It covers reserves, budget, insurance, litigation, delinquency, and ownership in one document.
Is there any pending or threatened litigation. What percentage of units are owner-occupied versus investor-owned. What is the current reserve balance against the budget. Has the milestone inspection or SIRS been completed, and if so, what did it find. Straight questions, straight answers.
I want to see the master policy's coverage amount and the per-unit deductible, not just hear that "they have insurance." A gap here is one of the most common and fastest-growing reasons a Florida building fails warrantability right now.
If the building looks clean, we move forward like normal. If it does not, I tell you immediately, before you spend money on inspections or an appraisal, and we talk about whether there is still a financing path or whether it is time to look at a different building.
“A denied building is not a dead deal. It just means we stop asking Fannie and Freddie and start asking the 160 lenders who will actually look at it.”Tony Fitzgerald · The Mortgage Jedi
A denied building rules out one lane, not every lane. Here is where I usually go next, and who each route tends to fit.
| Route | How it works | Usually fits |
|---|---|---|
| Portfolio lender | A bank or lender that keeps the loan on its own books instead of selling it to Fannie or Freddie. They set their own rules and evaluate the actual building, not a checklist. | Buyers with strong credit and income buying into a building that has one or two specific flags, like litigation or reserves, rather than a fundamentally troubled project. |
| Non-QM lender | Non-qualified mortgage programs built for files that fall outside standard guidelines, often paired with a larger down payment and more flexible documentation. | Self-employed buyers, investors, and anyone whose income does not fit neatly into a W-2 box, on top of a non-warrantable building. |
| Larger down payment | Putting more down, often notably more than a standard twenty percent, offsets the risk a portfolio or non-QM lender is taking on by financing a flagged project. | Buyers who have the cash and want to keep the widest lender pool open to them. |
| HELOC on the unit | Some HELOC lenders underwrite you and the unit's value directly, without running the full condo warrantability review a purchase loan requires. | Owners who already hold the unit and have equity in it, often the fastest route of all, and exactly the question that finds this page most. |
Already own the unit and just need access to your equity? See how a HELOC works →
Sometimes the smartest move is to keep looking for financing. Sometimes the smartest move is to walk away from the building. I will tell you which one it is.
These questions tell me which route to check first, and how fast I can get you an answer.
The questions I get asked most, answered first.
It is a building that does not meet Fannie Mae or Freddie Mac's rules for the project as a whole, so a conventional loan is not available on any unit in it, no matter how strong the buyer is. Common causes are low reserves, too many delinquent owners, pending litigation, one investor owning too many units, insurance gaps, or unresolved structural repairs.
Sometimes, yes. Some HELOC lenders underwrite the borrower and the unit's value without running the full condo warrantability review that a purchase loan requires. It depends on the specific lender, your equity, and your file. I check this early because it is often the fastest route for someone who already owns the unit.
Because conventional condo loans get underwritten in two layers, you and the project. You can have excellent credit and income and still get turned down if the building itself fails Fannie or Freddie's checklist on reserves, litigation, ownership concentration, or insurance. That is a project-level decision, not a reflection of your file.
Generally, yes, portfolio and non-QM lenders who take on a building the GSEs will not usually price for that extra risk and often ask for a larger down payment. I will not quote you a number here because it depends on the lender, the building, and your file, but I will lay out the real tradeoffs before you commit to anything.
Yes. Boards fix this by rebuilding reserves to the required level, resolving litigation, completing milestone or SIRS repairs, or bringing delinquency and investor concentration back under the threshold. It can take anywhere from a few months to a few years depending on what triggered the flag, and some buildings never get there.
It depends entirely on the association or management company. Some hand it over in a day or two, some take a couple of weeks and charge a fee for it. I request it the moment we know the building, so we find out where you stand before you are deep into a contract with a clock running.
A Sarasota-area note. Downtown Sarasota and the barrier islands, Siesta Key, Longboat Key, Lido Key, are about as condo-heavy as Florida gets, and a lot of those buildings were built in the 1980s and 1990s. That means a wave of them are crossing the 25 and 30 year milestone inspection thresholds right now, and I am seeing more buildings drop off the warrantable list every few months as reserve studies and repair costs catch up with older construction. Add in what Florida's property insurance market has done to master policies, and a clean, warrantable building on the water is genuinely harder to find than it was five years ago. If you are house hunting on the islands or downtown, I would rather check the building before you write an offer than after.
So humans, search engines, and AI assistants all get it right.
Tell me the address and I will start pulling the reserve, litigation, and insurance picture today. If the building is clean, we move. If it is not, I will already know your next move.
For education and illustration only. This page describes general lending guidelines that change over time and are not a quote, rate, offer, or commitment to lend. Taking a HELOC or a portfolio or non-QM loan against a condo unit converts equity into debt secured by your home, may extend your repayment period, and can increase the total interest you pay over time. Your home is at risk if you do not keep up payments. Your actual terms depend on your complete application, the specific lender, the condo project's status, and credit approval. Tony Fitzgerald NMLS #1284924 · 1st Response Mortgage is a registered DBA of Barrett Financial Group, L.L.C., NMLS #181106 · FL License #MLD1880 · Equal Housing Lender · This is not a commitment to lend. All loans subject to credit approval.
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Tony Fitzgerald · NMLS #1284924 · 1st Response Mortgage is a registered DBA of Barrett Financial Group, L.L.C. · NMLS #181106 · Florida License #MLD1880 · 2701 East Insight Way, Suite 150, Chandler, AZ 85286 · Licensed in Florida · Equal Housing Opportunity Lender