Non-Warrantable Condos in Miami: How to Finance Them in 2026

Last updated: August 2026

A non-warrantable condo is a unit in a project that fails Fannie Mae or Freddie Mac project standards, so no conventional loan on it can be sold to either agency. The project fails, not the borrower. A file with strong income, credit, and cash reserves still gets declined if the association's building or balance sheet trips one of the disqualifiers in Fannie Mae Selling Guide B4-2. The recurring triggers are single-entity ownership above the limit, assessments 60 or more days past due on more than 15 percent of units, underfunded replacement reserves, pending litigation touching safety or structural soundness, nonresidential space above 35 percent, hotel-like or short-term rental operation, and, most often in South Florida, critical repairs that put the project in Unavailable status in Fannie Mae's Condo Project Manager [1]. Buyers then move to portfolio or non-agency financing, which generally costs more. Almost all of it is checkable before you spend a dollar on an appraisal.

What is a non-warrantable condo?

The term appears in neither rulebook. It is shorthand for a project that cannot pass the review a lender completes before selling your loan to Fannie Mae or Freddie Mac. Lenders run that review under delegated authority using association documents, so two lenders can reach different conclusions on the same building when the documents are ambiguous.

As of the August 5, 2026 Selling Guide, the methods are a Full Review, a Fannie Mae review through the Project Eligibility Review Service, an FHA project approval, or a waiver. Limited Review is no longer among them [4]. That path let a low loan-to-value primary-residence purchase skip most project underwriting, which is why some buyers were surprised at resale. Two changes went the other way: the waiver now covers projects of ten or fewer units not part of a larger development [5], and new attached Florida projects no longer route through the Review Service [3].

Why can't I get a mortgage on this condo?

One of a short list of project-level tests failed. These are the ones that come up in Miami.

Ownership concentration

A single owner, investor group, partnership, or corporation may not own more than 20 percent of units in a project of 21 or more units, or more than two units in a project of five to 20 units, counting units held under rental arrangements [1]. Owner-occupancy is narrower than it was: Fannie Mae retired the investment-property concentration cap for established projects under a Full Review in March 2026, so a building with many tenants is no longer disqualified on that basis alone [3]. New and newly converted projects still face a presale test of 50 percent of units conveyed or under contract to principal residence or second home purchasers [6].

Delinquent dues and underfunded reserves

No more than 15 percent of units may be 60 or more days past due on common expense assessments, and the same limit applies to special assessments [2]. Separately, a Full Review requires the budget to allocate at least 10 percent of annual budgeted assessment income to replacement reserves, or to show equivalent adequacy through a reserve study [2]. Fannie Mae has announced an increase to 15 percent under Lender Letter LL-2026-03, phased in with a later effective date, so ask your lender which standard applies to your application date [3].

Litigation, commercial space, and hotel operation

A project is ineligible if the association is named in pending litigation relating to the safety, structural soundness, habitability, or functional use of the project, with narrow exceptions for minor matters. Nonresidential or commercial space may not exceed 35 percent of total space. Projects licensed as a hotel or resort, offering registration services and short-term rentals, or running rental pooling agreements are ineligible [1], which removes a slice of Miami Beach inventory from conventional financing no matter how one unit is used.

Critical repairs and the Unavailable list

Projects needing repairs that significantly affect safety, soundness, structural integrity, or habitability are ineligible, as are those with material deficiencies or advanced deterioration, and an assessment funding critical repairs that remain unaddressed keeps a project ineligible [1]. These standards began in Lender Letter LL-2021-14 after Surfside and were folded into the Selling Guide [7], with a parallel Freddie Mac standard in Guide Section 5701.3 [8]. Such a project can be assigned Unavailable status in Condo Project Manager, and loans on those units cannot be purchased even where a review waiver would otherwise apply [1][5].

Why do so many South Florida buildings fail?

Florida's inspection rules generate the paper trail the agencies now read. Section 553.899 of the Florida Statutes requires a milestone inspection of condominium and cooperative buildings three habitable stories or more in height at 30 years and every ten years after, with a phase two inspection when phase one finds substantial structural deterioration and repairs commenced within 365 days of that report [10]. Section 718.112(2)(g) adds the structural integrity reserve study on the same cycle, covering the roof, structure, plumbing, electrical, waterproofing, and any item with deferred maintenance or replacement cost above $25,000 [11].

A phase two report reads like a description of critical repairs, and a study that forces reserve funding upward produces a special assessment that keeps a project ineligible until the work is done. That is the backdrop behind Miami-Dade's 12 months of existing condominium supply and a $400,000 median condo price in July 2026, down from $406,000 a year earlier [12]. Buildings that have completed inspections and funded reserves trade differently than those that have not, including inside one submarket like Brickell. Have your own attorney read the documents.

How do I find out if a condo is warrantable before I make an offer?

Most of the answer is free, and the rest fits inside a normal inspection period. Order matters, since the project review is the cheaper of the two reviews to fail first.

Have a lender check project status first. A loan officer can look up the building in Fannie Mae's Condo Project Manager and Freddie Mac's Condo Project Advisor before you write anything. A project already flagged Unavailable is a one-day decision at no cost.

Ask three questions of the listing agent in writing. Is there an active or pending special assessment, and what does it fund. Is the association a party to litigation. Has the building completed its milestone inspection, and did it move to phase two. None require a questionnaire, and all three are what most often ends a conventional file.

Get the inspection paperwork. Milestone reports and reserve studies are association records, and in many South Florida buildings they have already circulated to owners. A phase two report showing deterioration and no completed repairs tells you the likely outcome before a lender opens a file.

Read the two documents that predict the rest. The budget and reserve schedule show the replacement reserve allocation as a share of assessment income, which is the test in the guide. Board minutes are where unfunded repair discussions surface first.

Then buy time to verify. Write the contract with a financing period long enough to absorb questionnaire turnaround, and hold the appraisal until the project clears. A buyer consultation is the place to sequence this against your deadlines, and your attorney should review the litigation and assessment disclosures.

What is the Fannie Mae condo questionnaire and who fills it out?

It is Fannie Mae Form 1076, issued by Freddie Mac as Form 476, plus the building safety and deferred maintenance addendum added after 2021 [9]. The association or its management company completes it, not you, the seller, or your agent. Most Florida managers charge a fee and take weeks, so it belongs at the front of your timeline.

It asks the association directly about the items above: ownership concentration, delinquency, litigation, insurance, reserves, when the building was last inspected, and whether any findings affected safety, soundness, structural integrity, or habitability. Some boards decline specific questions on their attorney's advice. A blank where an answer belongs is not neutral, because lenders treat unresolved items conservatively.

What are my financing options for a non-warrantable condo?

Gabriel is a licensed real estate agent, not a licensed mortgage loan originator. Under the federal SAFE Act he cannot advise on loan products, terms, or pricing, and this section does not do that. What follows is general background so you know what to ask. The actual conversation belongs with a licensed loan officer.

Two categories of lender operate outside the agency channel. Portfolio lenders keep the note on their own balance sheet, and non-agency lenders sell into private securitizations. Both set their own project standards, so the answer varies by institution.

The tradeoffs generally run in one direction. Compared with a conforming loan to the same borrower, non-agency financing tends to carry a higher rate, a larger down payment, more months of post-closing reserves, and less tolerance on debt-to-income. Those are general characteristics rather than a quote, and none of this recommends any product or lender. Ask a licensed loan officer to price your scenario, get more than one opinion, and compare what you are shown against the Freddie Mac Primary Mortgage Market Survey [13].

One effect to weigh: a unit financed outside agency channels will likely resell to a buyer facing the same constraint, which narrows the pool until the project's status changes. That belongs in the offer.

Frequently asked questions

Does paying cash make the problem go away?

It removes your financing contingency, not the project's status. The same review applies to your buyer when you sell, so these units are typically priced with that constraint in mind.

Can a project become warrantable again?

Yes. Delinquency ratios improve, litigation settles, ownership blocs get sold down, and critical repairs get completed and documented. Status is reviewed when a lender submits updated documentation, on the association's timeline rather than yours.

Will any special assessment make a condo non-warrantable?

No. The question is what it funds and whether the work is done. A lobby renovation is not a critical repair. An assessment funding structural remediation identified in a phase two inspection, with the work still pending, is what the guide treats as ineligible [1]. FHA and VA run separate approval systems, so ask a licensed loan officer to check those lists too.

Gabriel

Sources

---

Gabriel A. Moyers, PA. eXp Realty. Florida License #3407280. Equal Housing Opportunity. This article is general information as of August 2026 and is not legal, tax, or financial advice. Verify current figures against authoritative sources before acting.