Non-warrantable condos in Florida: what makes a building ineligible for a conventional loan, the red flags in South Florida towers, and what buyers can do

October 31, 2026 · Zach Curtis, REALTOR®, Realty Hub

Short answer: "non-warrantable" is industry shorthand for a condo building that doesn't meet Fannie Mae's (or Freddie Mac's) project standards, so a standard conventional loan sold to them isn't available there. In South Florida, the usual reasons are unfinished critical repairs, litigation over the structure, condo-hotel operations, too much commercial space, or one owner holding too many units. Ask about the building before you write an offer, not after.

What Fannie Mae calls an ineligible project

Fannie Mae's Selling Guide lists the project characteristics that make its loans unavailable in a condo or co-op building (Fannie Mae Selling Guide B4-2.1-03). Fannie also says loans in projects with an "Unavailable" status in its Condo Project Manager are ineligible. A lender who believes a project has merit can request an exception. The items buyers in Hallandale Beach, Hollywood, Dania Beach and Aventura run into most are below.

Critical repairs

A project is ineligible if it needs repairs that significantly affect its structural integrity, soundness or habitability, or its financial viability or marketability. Fannie's examples include:

1. Material deficiencies that could lead to failure of a critical element within a year.
2. Mold, water intrusion or damaging leaks.
3. Advanced physical deterioration.
4. Failing a mandatory structural inspection.
5. Unfunded repairs costing more than $10,000 per unit that should be done within the next 12 months.

Fannie names sea walls, balconies, parking structures, waterproofing and elevators as items to consider. If a structural or mechanical inspection was completed within the past 3 years, the lender must review the report.

A special assessment tied to a critical repair keeps the project ineligible until the issue is fixed. Once the repairs are completed and documented, the project can qualify again. Florida's milestone inspection reports and structural integrity reserve studies are the kinds of documents that surface these issues; see milestone inspections and SIRS and who pays a special assessment.

Litigation

A project is ineligible when the association is a party to pending litigation, or the developer is a party to litigation over the project's structural soundness, habitability or functional use. Fannie treats some minor matters as acceptable, such as:

• suits the insurer is defending and that insurance covers
• suits where the association is collecting past-due assessments
• suits whose expected costs stay under 10% of funded reserves

Ask the association or manager whether any litigation, arbitration or mediation is underway.

Condo-hotels and rental programs

Buildings managed like a hotel are ineligible. Signs Fannie lists include:

• the association is licensed as a hotel
• owners are required to join a rental pool
• owners can't occupy their units during parts of the year
• hotel services such as front-desk registration and daily cleaning
• marketing as a hotel, resort or investment opportunity

Beachfront towers along A1A in Hollywood and Hallandale Beach are worth asking about.

Commercial space, business income and concentrated ownership

1. Commercial space: no more than 35% of the project, or of the building it's in, can be commercial or mixed-use. Rental apartments and hotel floors count as commercial space.
2. Business income: the project is ineligible if the association gets more than 10% of its budgeted income from businesses open to the public, such as a restaurant or spa.
3. Single-entity ownership: in projects with 21 or more units, one owner can hold no more than 20% of the units. Smaller projects have lower limits.
4. Recreation leases: mandatory memberships paid to an outside party, and recreational leases, make a project ineligible.
5. Termination: projects going through termination or insolvency are ineligible. That includes a building that has voted, or is voting, on termination.

What buyers can do

1. Before writing an offer, ask your lender to check the building's project status.
2. Read board minutes, the latest inspection reports and the reserve study for repairs, assessments and lawsuits.
3. Keep a financing contingency in your contract long enough for the lender's project review.
4. Ask lenders whether they offer loans they keep in their own portfolio for buildings that don't meet Fannie or Freddie standards, and compare the terms.
5. Check FHA separately; see how to check if a condo is FHA-approved.

Budget help: condo down payments and why condo fees are high. Browse Hallandale Beach, Hollywood, Dania Beach or Aventura, then start at Ready to buy.

Zach Curtis, Realtor, Realty Hub, license SL3664129. Equal Housing Opportunity. General information, not legal, tax, insurance or lending advice. Lender and investor guidelines change; confirm with your lender.

Published October 31, 2026 by Zach Curtis, REALTOR®, Realty Hub, license SL3664129. General information for South Florida, not legal, tax, insurance or lending advice. Laws, programs and prices change; check the official sources above, and ask a Florida attorney, CPA, insurance agent or lender about your situation. Listing numbers are asking prices and rents from BeachesMLS on the date shown. Equal Housing Opportunity. Zach Curtis and Realty Hub follow federal, Florida and Broward County fair housing law. Every listing is open to everyone. We never steer anyone by race, color, religion, sex, national origin, disability, familial status, age, sexual orientation, gender identity, or any other protected class.