Non-warrantable condo loans exist for one reason. Fannie Mae and Freddie Mac will not buy a mortgage on every condo building. So when a project fails their checklist, conventional financing disappears overnight.

That happens often in South Florida. However, it does not mean you cannot buy or refinance. Instead, it means you need a different kind of lender.

In short, non-warrantable condo loans are built for exactly this situation.

What Makes a Condo Non-Warrantable?

A warrantable condo meets agency project standards. A non-warrantable one does not. Therefore, it needs different financing.

Several issues commonly trigger that label:

• The reserve fund is too small.
• Too many units are behind on HOA dues.
• One owner or entity holds too many units.
• The building has open structural repairs or an evacuation order.
• Litigation involves the association.
• Commercial space takes up too much of the building.
• The project shows an “Unavailable” status with Fannie Mae.

Notably, the unit itself may be perfect. The building is what fails.

What Changed for Condos in 2026

Fannie Mae issued Lender Letter LL-2026-03 in March 2026. Freddie Mac matched it. Several rules shifted at once.

Some changes help Florida buyers. Others tighten the screws. Below, we cover both honestly.

The Reserve Rule Tightens in January 2027

This is the big one. In short, agencies now want more cash in the bank.

The required reserve rises from 10% to 15% of the yearly budget. It applies to loan files dated January 4, 2027 or later.

Reserve studies face tighter rules too. Lenders must now use the highest funding amount the study suggests. Meanwhile, the older baseline method no longer counts.

So what does that mean for you? Some buildings that pass today will fail in January. Therefore, if your building sits near the line, moving sooner may save you money.

Good News for Florida Condo Buyers

Not every change was a crackdown. In fact, three of them clearly help.

First, Fannie Mae dropped the special PERS review for new Florida condo projects with attached units. Those projects now follow the same path as the rest of the country.

Second, the 50% investor cap is gone for older projects under Full Review. So a building with lots of rentals is no longer blocked for that reason alone.

Third, small projects got easier. Buildings with ten units or fewer may now skip the project review.

Insurance Deductibles Now Have a Ceiling

Florida boards have faced brutal insurance pricing. As a result, many raised deductibles to keep premiums down.

There is now a cap. The master policy deductible cannot top $50,000 per unit for required perils. That rule applies to loan files dated July 1, 2026 or later.

Also, if the master policy has a per-unit deductible, you must carry your own unit owner policy. It must cover at least that deductible.

How We Finance Non-Warrantable Condos

Agency rules do not bind every lender. Portfolio lenders keep loans on their own books instead of selling them. As a result, they write their own guidelines.

That is where non-warrantable condo loans come from. Moreover, we place them with lenders who actually know Florida buildings. Depending on your goal, several paths work:

Portfolio condo loans fund primary homes and second homes in buildings the agencies reject.

DSCR loans qualify an investment condo on its rental income. See our DSCR loan programs.

Bank statement loans suit self-employed buyers. Review our bank statement options.

Foreign national loans serve buyers without United States credit. Our foreign national page explains the terms.

Jumbo portfolio loans handle higher balances. Learn more on our jumbo loan page.

What Non-Warrantable Condo Loans Cost

Flexibility is not free. Therefore, expect three trade-offs.

First, the down payment usually starts higher. Many non-warrantable condo loans begin near 10% to 25%, and investment purchases often ask for more.

Second, the rate typically runs above a conventional rate. However, the gap depends on your credit, your equity, and the building itself.

Third, lenders want cash reserves after closing. Six to twelve months of payments is common.

Even so, the math frequently works. Non-warrantable buildings often sell at a discount, because the buyer pool is smaller. As a result, that discount can offset years of extra interest.

How to Check Your Building

Start before you write an offer. In short, ask the association three things.

First, request the current budget and reserve balance. Second, find out whether any litigation is pending. Third, confirm whether a milestone inspection or a structural reserve study flagged required repairs.

Meanwhile, you can check the project status yourself through the Fannie Mae Condo Status Finder.

Above all, do not wait until underwriting. A building problem found late kills deals and costs deposits.

Talk to a Broker Who Knows These Buildings

Every project is different. Consequently, the right lender depends on which rule your building trips.

Lakebridge Lending arranges non-warrantable condo loans across Florida through both agency and portfolio lenders. In practice, we review the building first, then match it to a lender who will actually close. Of course, if your condo turns out to be warrantable after all, we will tell you, because that loan costs you less.

For general condo guidance, see our condo financing page. To compare loan types more broadly, read our guide to non-QM and QM loans.

Non-Warrantable Condo FAQs

What makes a condo non-warrantable?

A condo is non-warrantable when the project fails Fannie Mae or Freddie Mac rules. For example, Fannie Mae will not buy loans in projects that need critical repairs. Other common reasons include litigation, short-term rental use and high commercial space.

How do Florida milestone inspections affect condo loans?

Florida requires a milestone inspection for condo buildings three stories or taller by December 31 of the year they turn 30, then every 10 years (s. 553.899). If the report shows repairs that are not done, conventional lenders may decline the project. In that case, a non-warrantable loan can still work.

How much do I need to put down on a non-warrantable condo?

Many non-warrantable condo loans start near 10% to 25% down for a home you live in. Investment purchases usually need more. Also, rates often run higher than conventional loans because these are portfolio or non-QM loans.

Ready to find out where your building stands? Contact our team or call (754) 289-0196 for a free review.

This page is for general information only. It is not lending or legal advice. Agency guidelines, lender overlays, and program terms change often and depend on individual qualification. Figures and effective dates reflect Fannie Mae guidance published as of September 2026.