Florida condo mortgages have become increasingly challenging since the surfside condo collapse in South Florida. In general, there are two types of conforming condo Florida condo loan s purchased from Fannie mae and Freddie mac they are Full review condo Florida condo loans and limited review because these offer the best interest rates. Outside of these 2 options you have NON QM and private Florida condo mortgage lenders. 

Florida Condo Minimum Down Payment 

• {0 Down 100% financing } VA Florida condo loan For Florida VA Approved Condos. 
• {3%  Down Payment 0r 97% financing} for First Time Home Buyers.
• {3.5% Down Payment or 96.5% finacning} for FHA Approved Condo Florida condo loans.
• {5% Down Payment or 95% financing} for Condo move-up Home Buyers.
• {10% Down payment or 90%}on Primary Nonwarrantable or Second Home Condo Florida condo loans.
• {10% Down payment or 90%} Jumbo Condo Florida condo loan s up to 3,500,000
• (20% Down payment or 80%} on an Investment Property Condo Florida condo loan.
• (25%  downpayment or 75%) LTV for Full condo review. 

Most Common Condo Approval Issues

This is a partial list of considerations Florida mortgage lenders have when reviewing a condo project:

• Does the association have enough reserves for maintenance future repairs, and replacements?
• Does the HOA have pending litigation?
• How many condo units are owner-occupied?
• Does the association have enough funds for maintenance and reserves?
• How many units are owned by a single person or entity?
• How many owners are past due on their HOA bills?
• Does the condo have the allowable deductible for the master property insurance coverage?

How To Check If A Florida Condo Is Approved?

• For FHA Florida condo loans, we check the FHA Approved List.
• For Conventional Florida condos, we check the Fannie Mae Approved Condo List.
• For VA Florida condo loans, we check the VA Approved List.
• First, we check a few of our Florida-approved condo mortgage lender’s internal list.
• If the condo project is not listed on the FHA-approved condo list, we can do an FHA Spot Approval if less than 10% have FHA financing.
• The VA allows Florida condos on the FHA or Fannie Mae condo list.
• If a Florida condo is not listed on any of our condo lists, then can request a Fannie Mae full review.
• If the condo project does not qualify then can request a Fannie Mae limited review.

FHA Florida Condo Florida condo loan Spot Approval  Requirements

Full Review Florida Condo Mortgage Requirements

here list of the most common items that can cause a Fannie Mae & Freddie Mac Full Florida Condo Project Review to be denied.

• A reserve study instead of 10% reserves allocated from the current year budget may be considered if prepared within the past 24 months by an independent 3rd party with expertise in Condominium Project Reserves.
• No more than 15% of the unit owners may be more than 60 days delinquent on their monthly HOA dues or special assessments.
• No one person or entity can own more than 20% of the total units.
• Small 1-4 unit condo projects are eligible as long as no individual owns more than 1 unit.
• 5-20 unit condo projects are eligible as long as no individual owns more than 2 units.
• Commercial space can’t exceed 35% of the total project.
• The current year-approved budget must show that a percentage of the operating expenses are to be allocated to a reserve account.
• Litigation against the developer or contractor that is named as a party that relates to the safety, structural The most common items that can lead to a denial of a Fannie Mae and Freddie Mac Full Condo Project Review. Soundness and habitability is not allowed.
• Pending litigation “Litigation concerning localized damage to a unit in the project that does not impact the overall safety, structural soundness, habitability, or functional use of the project” is acceptable
• Pending litigation when the amount of the claim is known is acceptable.
• Investment properties ONLY, No more than 51% of the units can be investor-owned.

Limited Review for a Florida Condo Mortgage Lender Requirements

A Fannie Mae limited review only requires that the project meet a few requirements listed below, Fannie Mae allows this because the down payment requirement is higher.

• The developer has transferred control of the association to the individual unit owners.
• 5-20 unit condo projects are eligible as long as no individual owns more than 2 units.
• Commercial space can’t exceed 35% of the total project.
• Litigation against the developer or contractor that is named as a party that relates to the safety, structural soundness, habitability is not allowed.
• Pending litigation “Litigation concerning localized damage to a unit in the project that does not impact the overall safety, structural soundness, habitability, or functional use of the project” is acceptable
• Pending litigation when the amount of the claim is known is acceptable.
• The project must be 100% complete, with no additional phases to be built.
• At least 75% of the total units are sold and closed.
• Must not be a condotel or have condo-hotel-type amenities such as a rental desk.
• No one entity can own more than 75% of the units
• Small 1-4 unit condo projects are eligible as long as no individual owns more than 1 unit.

Florida Condo Mortgage Frequently Asked Questions 

Q. How can Florida mortgage lenders use the list of “approved” projects posted on Fannie Mae’s website?
The list of Florida-approved condo projects “Approved by Fannie Mae” is now in Condo Project Manager™(CPM™). (The list that was previously located on the Project Eligibility Review Service (PERS) page on fanniemae.com has been retired.) Non-CPM users may request read-only access to perform searches and print reports, but not to certify a Project or Phase. Contact your Corporate or Technology Manager Administrator to gain CPM access. Even when a project has Fannie Mae approval, lenders are still responsible for verifying and documenting that the project has appropriate insurance (e.g., project, liability, fidelity, flood, etc.) as required in the Selling Guide, Chapter B7-3, Property and Flood Insurance and Selling Guide, Chapter B7-4, Liability and Fidelity/Crime Insurance Requirements for Project Developments. Lenders need special approval to sell co-op Florida condo loan s to Fannie Mae.

Q. Does Fannie Mae require a unique project identifier?
No. However, condo mortgage lenders are encouraged to include the condo or co-op’s IRS Federal Tax Identification Number (TIN) in the Florida condo loan file. CPM includes a field to input the condo’s TIN. This information helps to distinguish between projects with similar names and assists with project identification.

Q. Revised: What is the difference between legal phases and construction or marketing phases?
A legally phased project requires that a supplement or amendment to the master deed or declaration be recorded in the public records to formally make additions to the project. Lenders can approve legal phases for projects provided the subject unit’s legal phase meets all requirements of the Full Review process. Construction or marketing phases typically exist for the developer’s convenience and are covered under a single master deed or declaration. Construction phases typically apply to projects with multiple buildings such as low-rise, townhouse, or garden-style projects. Marketing phases typically apply to projects with a single mid-rise or high-rise building. Lenders are not delegated to review construction or marketing phases, and new projects completed on a marketing or construction phase basis must be submitted to PERS for review.

Q. What is a “newly converted” condo project?
A gut or non-gut rehabilitation condo that does not meet the criteria of “established” is considered “newly
converted.” Newly converted non-gut rehabilitation projects with more than four units must be submitted to Fannie
Mae for review through PERS.

Q. When calculating presales for new or newly converted projects, do units have to be conveyed (title
transferred) to count toward the total number of presales?
No. Presales are calculated based on both units that are under contract and units that have been conveyed (i.e., title
transferred)

Q. Does non-incidental business income for condo projects include lease agreements with telephone, cable, and
Internet companies?
Income earned by the homeowners’ association (HOA) that is the result of lease agreements with telephone, cable,
and internet companies does not meet the definition of active ownership or operation of amenities or services
available to unit owners and the general public. Therefore, the 15% cap (relative to the project’s operating budget)
does not apply to this type of income.

Q. Do the limitations for non-incidental income apply when the HOA is earning money from the leasing of
commercial space to a business entity?
When an HOA receives income because it rents a space located within its project to a business entity, the rental
income is not subject to limitations for business income because the HOA is leasing the space and not “actively”
operating or owning a business. The limitations for non-incidental business income apply only when the HOA earns
income from actively owning or operating a business enterprise.

Q. Does Fannie Mae allow shared amenities?
Shared amenities generally are not permitted between the HOA and a third party such as the developer, sponsor, or
management company. Shared amenities are allowed when two or more HOAs share amenities for the exclusive use
of the unit owners.
The associations must have an agreement in place governing the arrangement for shared amenities that includes:
• a description of the shared amenities;
• a description of the terms for sharing the amenities;
• provisions for the funding, management, and upkeep of the shared amenities; and
• provisions to resolve related conflicts between the associations.

Q. Does Fannie Mae allow the HOA to lease parking spaces for use by condo unit owners?
Yes. Parking amenities provided under commercial leases or parking permit arrangements with parties unrelated to
the developer are acceptable.

Q. Does Fannie Mae allow a unit owner’s parking space to be financed by the mortgage?
Yes. Fannie Mae permits the financing of a single or multiple parking space(s) with the mortgage, provided that the parking space(s) and residential unit are included on one deed as evidenced by the legal description in the mortgage.
In such cases, the Florida condo loan -to-Value, Combined Florida condo loan -to-Value, and Home Equity Combined Florida condo loan -to-Value ratios are based on the combined value of the residential unit and the parking space(s). Projects in Need of Critical Repairs (including material deficiencies and significant deferred maintenance) and Special Assessments

Q. Are lenders expected to apply these requirements to existing project approvals?
Lenders are expected to apply these requirements to Florida condo loans with application dates on or after Sept. 18, 2023. However,
lenders may incorporate these policy changes into the review process immediately. If a lender has an unexpired
project review completed prior to Sept. 18, 2023, they must still validate these new requirements have been met for
Florida condo loan applications dated on or after that date. This applies to all review types for projects consisting of five or more
attached units.

Q. What requirements apply if a project has an unexpired lender certification in CPM on or after Sept. 18, 2023?
CPM will be updated the weekend of Sept. 15, 2023, with new data elements related to critical repairs, material
deficiencies, significant deferred maintenance, inspection reports, evacuation orders, and special assessments. For
all unexpired CPM project eligibility certifications, the lender must update the certification with the new data
requirements for Florida condo loan applications dated on or after Sept. 18, 2023. The new data requirements apply to all initial
project review submissions to CPM on and after Sept. 18, 2023, regardless of the Florida condo loan application date. Florida condo loan s with
application dates prior to Sept. 18, 2023, for which the lender has an unexpired project review in CPM completed prior
to that date may be underwritten in accordance with the policies outlined in LL-2021-14 and the unexpired CPM
certification.

Q. As outlined in the Selling Guide, B4-2.1-02, Waiver of Project Review, Fannie Mae to Fannie Mae limited cashout refinances must be reviewed for critical repairs and evacuation orders. Does this apply to all project types?
The requirement only applies to condo and co-op projects consisting of five or more attached units.
However, lenders are still required to ensure the property complies with our requirements outlined in the Selling
Guide, Chapter B2-3, Property Eligibility Requirements, in which the property must be safe, sound, and structurally
secure.

Note: A value acceptance (appraisal waiver) may not be exercised if the lender believes that an appraisal is
warranted based on additional information the lender has about the property or subsequent events. If critical
repairs or large special assessments exist, an appraisal may be necessary to determine the impact to
marketability. Refer to the Selling Guide, B4-1.4-10, Value Acceptance (Appraisal Waiver) for additional
information.

Q. Under the Waiver of Project Review, lenders are not required to determine compliance with the
requirements relating to projects in need of critical repairs and special assessments for Florida condo loan s secured by
detached condo units. What if the detached condo unit is located in a condo project consisting of both
detached and attached condo units, does the lender need to review the condo project for criticalrepairs and
special assessments?
If the subject unit is detached, the lender is not required to comply with the requirements for projects in need of
critical repairs and special assessments. However, lenders are still required to ensure the property complies with our
requirements outlined in the Selling Guide, Chapter B2-3, Property Eligibility Requirements in which the property
must be safe, sound, and structurally secure.
Note: A value acceptance (appraisal waiver) may not be exercised if the lender believes that an appraisal is
warranted based on additional information the lender has about the property or subsequent events. If critical repairs
or large special assessments exist, an appraisal may be necessary to determine the impact to marketability. Refer to
the Selling Guide, B4-1.4-10, Value Acceptance (Appraisal Waiver) for additional information.

Q. As outlined in the Selling Guide, B4-2.1-02, Waiver of Project Review, review for critical repairs and special
assessments is not required for Florida condo loans secured by detached units, 2-4 unit projects, and Fannie Mae to Fannie
Mae limited cash-out refinances for projects consisting of less than five attached units. What if the project and
property meet the requirements for Waiver of Project Review, but the amenities only, such as the clubhouse,
require critical repairs? Is the project ineligible?
Florida condo loans secured by detached units, a unit in a 2–4-unit project and Fannie Mae limited cash-out refinances in projects
consisting of less than five attached units are not required to comply with the requirement to review for critical
repairs and projects with evacuation orders. However, lenders are still required to ensure the property complies with
our requirements outlined in the Selling Guide, Chapter B2-3, Property Eligibility Requirements in which the property
must be safe, sound, and structurally secure. If the lender discovers during the normal underwriting process a
circumstance that impacts the common areas/amenities, the lender must perform additional due diligence to
ensure there is no negative impact to marketability as outlined in the Selling Guide, B4-1.1, General Appraisal
Requirements.
Note: A value acceptance (appraisal waiver) may not be exercised if the lender believes that an appraisal is
warranted based on additional information the lender has about the property or subsequent events. If critical repairs
or large special assessments exist, an appraisal may be necessary to determine the impact to marketability. Refer to
the Selling Guide, B4-1.4-10, Value Acceptance (Appraisal Waiver) for additional information.

Q. Revised Policy states that critical repairs include “any project that failed to pass state, county, or other
jurisdictional mandatory inspections, or certifications specific to structural safety, soundness, and
habitability”. Are there any exceptions for excluding municipal inspections?
No, municipal inspections are not excluded from the policy. Projects that have failed to pass any local regulatory
inspection(s) are not eligible.
Note: Local regulatory inspections may not encompass all the components of the project/building(s) that require
review for critical repairs. For example, a façade inspection report is not a substitute for a building condition report
or inspection as it most likely does not contain information related to the condition of all the building’s structural
elements. Lenders may need to review additional documentation to determine that the other building’s structural
elements are not in need of critical repairs.

Q. Are there any options if a project has not obtained the required recertification by the local jurisdiction?
No. The recertification process must be complete with evidence the project has passed all the required inspections.
Typically, the local jurisdiction will issue a letter indicating the project has passed the recertification process.

Q. What if a jurisdiction classifies a project as unsafe, non-compliant, or other similar rating? Does that
mean the project is ineligible?
Yes. Any project that fails to pass state, county, or other jurisdictional mandatory inspections and/or certifications
specific to structural soundness, safety, and habitability is not eligible as outlined in of the Selling Guide, B4-2.1-03,
Ineligible Projects.

Q. What if a jurisdiction classifies a project as safe or other similar, but there are critical repairs that have
not been completed? Is the project ineligible?
The project remains ineligible until critical repairs have been completed. Our policy requires lenders to determine
the project is safe, does not need critical repairs, and passes any regulatory inspection. The policy is not specific to
any jurisdiction and should be applied consistently across all jurisdictions as applicable.

Q. How can lenders obtain information about critical repairs, material deficiencies, significant deferred
maintenance, and special assessments?
There are various sources that may provide the information, including the homeowners’ association’s (HOA’s)
meeting minutes, financial statements, engineer’s reports, or other documents as outlined in the Selling Guide, B4-
2.1-03 Ineligible Projects. These sources are neither prescriptive nor exhaustive. Lenders are responsible for
determining which documents they need to review. Parties with an interest in the transaction such as the real
estate agent, seller, buyer, or unit owner may provide the documentation.

Q. When the HOA or management company returns a project questionnaire that does not answer questions
related to critical defects and significant deferred maintenance or states the information is unknown or not
applicable, are lenders required to obtain additional documentation to support no critical repairs are
required?
The GSE Condo Questionnaire and the associated addendum are optional forms.
• Lenders often use their own forms or find other types of documentation to help them complete the project underwriting.
• When a lender is using a questionnaire during their underwriting process and the questionnaire does not provide the information the lender needs to make the representation and warranty that the project meets our eligibility guidelines, then the lender will need to obtain additional information or documentation to make the
determination.
• Our Selling Guide, B4-2.1-03, Ineligible Projects, provides examples of additional documentation that may be helpful to review. If the lender is unable to determine that the project does not need critical repairs, then Florida condo loans on units in the project are not eligible for sale to Fannie Mae

Q. If a lender is reviewing a small project under the Limited Review process that does not have a budget and
financial records or a reserve study, how can the lender determine there are no critical repairs or special
assessments?
Fannie Mae is not prescriptive on what documentation lenders obtain to make the determination See Q22 above for various sources that may provide this information. If the lender is unable to obtain the information to make the determination, Florida condo loans on units in the project are not eligible for sale to Fannie Mae.

Q. What options are there if the association or property manager is not willing to provide a copy of any inspection
report completed within the past three years, information to confirm the project is not in need of critical
repairs, or information on special assessments?
The lender must obtain and review a copy of any inspection completed within the past three years. The lender may
be able to obtain the information from parties that have an interest in the transaction: buyer, seller, real estate agent,
or unit owner for a refinance. If the lender is unable to obtain the information to make the determination or obtain
the required inspection reports, Florida condo loans on units in the project are not eligible for sale to Fannie Mae.

Q. Guidelines related to projects in need of critical repairs state lenders must review structural and/or
mechanical inspections that have been completed within 3 years of the lender’s project review date. What if
an inspection has not been completed? Is the project ineligible?
No. We do not require that an inspection be completed for any project. However, if one has been completed within 3
years prior to the project review date, then it must be reviewed. If an inspection has not been completed, lenders are
still required to review other sources of documentation to ensure the project is not in need of critical repairs.

Q. If a project has levied a special assessment, does the budget also have to include a 10% reserve requirement?
If the lender is completing a Full Review, the budget must allocate 10% reserves. Special assessments cannot be
used instead of the 10% budget reserve allocation.

When the HOA indicates that a special assessment may be required in the future but is not yet planned or
approved, what action must the lender take?
If a special assessment is not yet planned or approved, but it is disclosed that one will most likely be required in the
future, the lender must determine the project is not in need of critical repairs as outlined in the Selling Guide, B4-2.1-
03, Ineligible Projects. The lender is not expected to evaluate the special assessment details that have not been
implemented by the association.

Q.Policy states, “Any unfunded repairs costing more than $10,000 per unit that should be undertaken within the
next 12 months (does not include repairs made by the unit owner or repairs funded through a special
assessment).” Can Fannie Mae provide further definition of “unfunded”? Would special assessments that are
not yet paid in full be considered funded or unfunded? Are association Florida condo loan s an acceptable source of funding
for repairs?
By unfunded we mean the HOA does not have the funds in place to pay for the repairs and must postpone the
remediation. It is acceptable if the HOA imposes a special assessment or obtains a Florida condo loan to fund the repairs. However,
if the special assessment is related to safety, soundness, structural integrity, or habitability, all related repairs must
be fully completed.

Q. What are some examples to help make the determination as to whether an outstanding repair is routine or
critical?
Fannie Mae is not prescriptive on what constitutes a critical repair, however, some examples include but are not
limited to any mold, water intrusion or potentially damaging leaks, advanced physical deterioration of load bearing
structures, failure of roof, unsafe balconies, foundation, or parking structure issues, that if left uncorrected, could
result in critical element or system failure. Routine repairs are preventative in nature or part of normal capital
replacements (e.g., focused on keeping the project fully functioning and serviceable) accomplished within the
project’s normal operating budget or through a special assessment and are similar to proactive maintenance repairs.
A delay in the repair would not result in critical elements or system failure.

Q.Policy states, “If damage or deferred maintenance is isolated to one or just a few units and does not affect the
overall safety, soundness, structural integrity, or habitability of the improvements, then this project
eligibility requirement does not apply.” Is there a percentage guidance that can be provided to define “few”?
If repairs are required to a single building in the project but the other buildings do not require repairs, would
this be acceptable?
There is no specific percentage guidance and lenders should evaluate based on the overall size of the projects. For
example, if three units are damaged in a 6-unit project the exception would not apply as most of the units in the
project are impacted. However, three units in need of repairs in a 600-unit project would indicate the damage or
deferred maintenance is isolated to just a few units. Lenders must still ensure that the outstanding repairs do not
affect the overall safety, soundness, structural integrity, or habitability of the project. This policy applies regardless
of the number of buildings impacted.
Note: the same guidance applies to the evacuation of just a few units.

Q. If only a portion of a project is impacted by an insurable loss (such as a fire), can we sell Florida condo loans secured by units
in other portions of the project that are not impacted by Fannie Mae?
A project impacted by a disaster must meet our requirements relating to projects in need of critical repairs, which
include material deficiencies, significant deferred maintenance, and special assessments. See Q31 above for
additional information.

Q.Policy states that lenders must review any structural or mechanical inspection report completed within 3
years. Can Fannie Mae clarify what inspections are included in this requirement? Would it be any inspection
completed or only mandatory inspections?
The lender must review a complete and true copy of any structural or mechanical inspection report (not just
mandatory inspections) that has been completed within the past three years.

Q. To assess whether the project is in need of any critical repairs (which include material deficiencies and
significant deferred maintenance), can the lender rely on the appraisal alone?
No. A lender should not rely solely on the appraisal to complete its project review as the appraisal may not have or
disclose information on critical repairs. Refer to Selling Guide, B4-2.1-03, Ineligible Projects, for example,
documents that may be helpful when reviewing for critical repairs.

Q. Are special assessments calculated independent of regular maintenance (HOA) fees/assessments or are they
added together when calculating delinquency of no more than 15% of units 60 or more days delinquent?
Delinquency for maintenance fees/assessments and special assessments are calculated separately. For example,
12% of unit owners are delinquent on regular maintenance fees/assessments and 6% are delinquent on special
assessments. The delinquency is not added to a total of 18% but is separately calculated as 12% and 6%.

Q. If there are multiple special assessments, is the delinquency calculated separately for each special
assessment?
Yes. Each special assessment is calculated separately. For example, 10% are delinquent on a special assessment that
started in 2021, and 8% are delinquent on a special assessment that started in 2022. The special assessment
delinquency is 10% and 8% respectively, not 18%.

Q. If a Florida condo loan is eligible for a Limited Review, is the required to validate that the project also meets the
requirements for another review type?
No. So long as the project and Florida condo loan meet all of the requirements for a Limited Review, which includes verifying that
there are no Ineligible Characteristics as outlined in the Selling Guide, B4-2.1-03, Ineligible Projects, the lender may
use the Limited Review process, even if the lender is aware that the project would be ineligible under another
project review type.

Q. If the Florida condo loan is eligible for a Limited Review (which includes verifying that there are no Ineligible Characteristics
as outlined in Selling Guide, B4-2.1-03, Ineligible Projects), does the lender still have to review the project
for critical repairs (including material deficiencies and significant deferred maintenance) and special
assessments?
Yes, as outlined in the Selling Guide,B4-2.1-03, Ineligible Projects, lenders are required to review the project for critical
repairs, and review of special assessments to determine they are not related to critical repairs.

Q. If the Florida condo loan has closed but not yet been delivered, is the lender still required to verify the project has not
been updated to the unavailable status in CPM prior to delivery of the Florida condo loan?
The project must continue to be eligible as of the note date and must not be unavailable in CPM. As outlined in the
Selling Guide, B4-2.1-01, General Information on Project Standards, the Florida condo loan must be delivered within 120 days of the
note date. When the elapsed time between note date and the delivery date exceeds this limit, the lender may deliver the
Florida condo loan only if the project continues to meet Fannie Mae project eligibility requirements at the time of delivery.

Q. How do lenders determine the marketability or condition of the project when Desktop Underwriter® (DU®)
offers an appraisal waiver?
An appraisal waiver does not relieve lenders of their responsibility to represent and warrant that the project meets
the requirements of the review type and the requirements outlined in the Selling Guide, B4-2.1-03, Ineligible Projects.
If critical repairs or large special assessments exist, an appraisal may be necessary to determine the impact to
marketability.

Q. Whatiflenders do not have access to CPM to determine if a project is unavailable?
The lender is responsible for verifying the project status in CPM. If the lender does not have access to CPM, they may
need to contact their aggregator(s) to determine if the project has an unavailable status. Any Fannie Mae-approved
seller/servicer can obtain access to CPM. Non-Fannie Mae-approved correspondents can also obtain access to CPM
as outlined in the CPM Non-Seller Access Quick Guide.

Q. If a project’s status in CPM is “unavailable,” can lenders submit documentation to have the status reevaluated?
If a lender has completed a review of the project and has documentation to prove the eligibility issues are resolved,
they can submit it to Fannie Mae for review and possible removal of the unavailable status. Lenders will need to
complete a review of the documentation and explain why they believe the project now meets Fannie Mae guidelines.