Florida Condo Mortgages
Buying a condominium in Florida has become more complex since the 2021 Surfside tragedy. New safety laws, stricter reserve requirements and tighter lender guidelines has created a new landscape of inspections, financial reviews and eligibility requirements.
- Post-Surfside laws now require structural inspections and fully funded reserves for Florida condos 3+ stories
- Lenders have tightened requirements with many older condos no longer qualify for conventional or FHA financing
- HOA fees are rising significantly as associations fund mandatory reserves and complete required repairs
- Financing options still exist even for "non-warrantable" condos that don't meet standard guidelines
This guide explains everything Florida condo buyers need to know about financing from the new laws affecting buildings to strategies for getting approved.
Post-Surfside Condo Laws
On June 24, 2021, Champlain Towers South in Surfside, Florida collapsed, killing 98 people. Investigations revealed long term structural deterioration and severely underfunded reserves that were never adequately addressed. In response, Florida enacted sweeping reforms through Senate Bill 4-D (2022), SB 154 (2023) and House Bill 913 (2025) to prevent future tragedies. These laws fundamentally changed how Florida condominiums must be inspected, maintained and funded.
Milestone Inspections
Florida now requires periodic structural inspections by licensed engineers or architects for condominium buildings three or more habitable stories in height:
| Building Location | First Inspection Due | Subsequent Inspections |
|---|---|---|
| Within 3 miles of coastline | By end of year building turns 25 years old | Every 10 years |
| More than 3 miles from coast | By end of year building turns 30 years old | Every 10 years |
Buildings that were already 30+ years old as of July 1, 2022 were required to complete initial inspections by December 31, 2024 with some extensions granted through 2025.
Structural Integrity Reserve Studies (SIRS)
Associations must now conduct a Structural Integrity Reserve Study, an engineering assessment that identifies structural components and determines how much money must be set aside for their repair or replacement.
SIRS must evaluate:
- Roof
- Load-bearing walls and primary structural members
- Foundation
- Fireproofing and fire protection systems
- Plumbing
- Electrical systems
- Waterproofing and exterior painting
- Windows and exterior doors
- Any other component with replacement cost exceeding $10,000 that affects structural integrity
SIRS deadlines:
- Most existing condos: Initial SIRS due by December 31, 2025
- Buildings with milestone inspections due 2025-2026: May complete SIRS concurrently no later than December 31, 2026
- Ongoing: SIRS must be updated every 10 years
Source: Florida Statutes Chapter 718; SB 4-D (2022), SB 154 (2023), HB 913 (2025).
Mandatory Reserve Funding
Perhaps the most impactful change is associations can no longer vote to waive or reduce reserves for structural components identified in the SIRS. Previously, Florida condo associations could vote to underfund reserves by choosing lower monthly fees over setting aside money for future repairs. This practice contributed to the deferred maintenance crisis that led to Surfside.
New requirements:
- Budgets adopted after January 1, 2025 must fully fund reserves per SIRS recommendations
- Reserves for structural components cannot be waived by owner vote
- Associations must allocate 100% of projected costs (no partial funding)
- Reserve funds must be kept separate from operating accounts
HB 913 (2025) Adjustments
Recognizing that the initial laws created financial hardship for some communities, HB 913 provided some flexibility while maintaining safety requirements:
- SIRS deadline extended from December 31, 2024 to December 31, 2025
- Reserve funding options expanded: Associations may fund reserves through regular assessments, special assessments, loans or lines of credit (with owner approval)
- Temporary pause allowed: Associations that complete milestone inspections may pause reserve contributions for up to 2 years to fund recommended repairs (with majority owner approval)
- "Habitable stories" clarified: Parking garages and other non-habitable floors don't count toward the 3 story threshold
- Threshold raised: The $10,000 minimum for reserve components increased to $25,000
How the New Laws Affect Condo Financing
Florida's new condo safety laws have significant implications for mortgage financing. Lenders now require proof that condo associations are complying with these requirements.
Fannie Mae and Freddie Mac Requirements
Conventional loans backed by Fannie Mae and Freddie Mac now require additional documentation for Florida condos:
- Milestone inspection compliance: Proof that required inspections have been completed
- No unsafe conditions: Certification that inspections revealed no conditions requiring evacuation or that make the building unsafe
- Repair status: If repairs were recommended, documentation of completion or a reasonable plan to complete them
- Adequate reserves: Evidence the association is funding reserves per SIRS recommendations
- No significant deferred maintenance: No major structural issues left unaddressed
If a condo project can't provide this documentation or if the documentation reveals problems the project may be deemed ineligible for conventional financing.
FHA Requirements
FHA loans have their own condo approval process and Florida's new laws add additional scrutiny:
- Projects must be on the FHA approved condo list or qualify for Single Unit Approval
- FHA requires at least 10% of the budget allocated to reserves
- No more than 35% of units can be FHA insured in any one project
- Projects with significant deferred maintenance or structural issues won't qualify
What This Means for Buyers
The practical impact is that many older Florida condos have become harder to finance or temporarily ineligible for conventional financing while associations work to comply with new requirements.
Common scenarios buyers encounter:
| Situation | Financing Impact |
|---|---|
| Building completed SIRS, fully funding reserves | Likely eligible for conventional/FHA financing |
| Building completed SIRS, reserves being phased in | May be eligible depending on lender |
| Building hasn't completed SIRS yet | May be ineligible for conventional financing |
| Inspection revealed structural issues, repairs pending | Likely ineligible until repairs completed |
| Building under 3 habitable stories | Exempt from milestone/SIRS requirements |
Warrantable vs. Non-Warrantable Condos
A warrantable condo means a condo project that meets the eligibility requirements of Fannie Mae and Freddie Mac. These condos qualify for conventional financing with standard terms and rates.
Warrantability requirements include:
- No single entity owns more than 10% of units (20% for smaller projects)
- At least 50% of units are owner occupied (for established projects)
- No more than 15% of units are 60+ days delinquent on HOA dues
- At least 10% of budget allocated to reserves
- No significant litigation pending against the association
- No unsafe conditions or significant deferred maintenance
- Commercial space limited to 35% of total square footage (25% for FHA)
- Adequate insurance coverage
- For Florida: Compliance with milestone inspection and SIRS requirements
What Makes a Condo Non-Warrantable?
A non-warrantable condo fails to meet one or more of the above requirements. Common reasons Florida condos become non-warrantable:
- SIRS not completed or reserves not adequately funded
- Structural issues identified in milestone inspection, repairs not complete
- Pending litigation against the association
- High investor concentration with too many units owned by investors vs. owner occupants
- Delinquency rate too high with more than 15% of owners behind on HOA dues
- Inadequate insurance and association can't obtain required coverage
- Condotels or hotel-condos which are units in buildings that operate like hotels
- Mixed-use buildings with excessive commercial space
- Special assessments pending for major repairs
Can You Still Finance a Non-Warrantable Condo?
Yes but you'll need alternative financing. Options include:
- Portfolio loans: Some banks keep loans on their own books rather than selling to Fannie/Freddie, allowing more flexibility
- Non-QM loans: Specialized loan programs designed for situations outside conventional guidelines
- Credit unions: Some credit unions offer condo financing with less restrictive requirements
At Alpine Mortgage, we work with multiple lenders who offer Non-QM financing for non-warrantable Florida condos.
What Lenders Look for in Florida Condos
Beyond standard mortgage qualification (credit, income, assets), lenders evaluate the condo project itself. Here's what they're looking for:
Project Documentation
| Document | What Lenders Review |
|---|---|
| Condo Questionnaire | Ownership percentages, occupancy rates, delinquencies, litigation, insurance |
| HOA Budget | Reserve allocations, financial health, special assessments |
| Reserve Study (SIRS) | Structural component funding levels, projected expenses |
| Milestone Inspection Report | Structural conditions, safety issues, recommended repairs |
| Insurance Certificates | Master policy coverage, hazard, liability, flood (if required) |
| CC&Rs and Bylaws | Rental restrictions, owner occupancy requirements |
| Meeting Minutes | Pending litigation, planned assessments, major decisions |
Red Flags That Can Sink Financing
- Structural safety concerns: Any indication the building is unsafe
- Incomplete or missing SIRS: For buildings required to have one
- Reserve shortfalls: Reserves below required levels without a funded plan
- Active litigation: Lawsuits against the association (especially construction defect claims)
- Insurance gaps: Inadequate master policy or lapsed coverage
- High delinquency: More than 15% of owners behind on dues
- Pending special assessments: Large assessments that could affect affordability
- Single entity ownership: One owner controlling too many units
Florida Specific Requirements
Beyond standard condo review, lenders now specifically verify for Florida condos:
- Has the building completed its milestone inspection (if required)?
- Were any unsafe conditions identified?
- Has the SIRS been completed?
- Is the association funding reserves per SIRS recommendations?
- Are there any pending structural repairs?
Loan Options for Florida Condos
Conventional Loans (Fannie Mae/Freddie Mac)
- Best for: Warrantable condos in compliant buildings
- Down payment: As low as 3-5%
- Credit score: 620+ minimum
- Requirements: Project must meet all warrantability criteria including Florida safety compliance
- Rates: Typically the most competitive
FHA Loans
- Best for: First time buyers, lower credit scores
- Down payment: 3.5% with 580+ credit
- Credit score: 580+ (500+ with 10% down)
- Requirements: Project must be FHA approved or qualify for Single Unit Approval; stricter commercial space limits
- Limitation: Maximum 35% of units in project can be FHA insured
VA Loans
- Best for: Veterans and active military
- Down payment: 0%
- Requirements: Project must be VA approved; similar structural compliance requirements
- Advantage: No PMI, competitive rates
Portfolio Loans
- Best for: Non-warrantable condos, unique situations
- Down payment: Typically 20-25%+
- Credit score: Usually 680-700+
- Requirements: Set by individual lender, more flexibility
- Rates: Slightly higher than conventional
Non-QM Loans
- Best for: Non-warrantable condos, condotels, high investor concentration
- Down payment: 20-30%+
- Credit score: Varies by lender (often 660+)
- Requirements: Designed for properties outside conventional guidelines
- Rates: Higher than conventional but provides access when other options don't exist
DSCR Loans (Investment Condos)
- Best for: Investment properties, qualification based on rental income
- Down payment: 20-25%+
- Credit score: 620+
- Requirements: Property cash flow must cover debt service
- Advantage: No personal income documentation required
Questions to Ask the HOA Before Buying a FL Condo
- Has the building completed its milestone inspection? What were the findings?
- Has the SIRS been completed? Are reserves being funded per the study?
- Are any special assessments planned or anticipated?
- What is the current delinquency rate on HOA dues?
- Is there any pending or threatened litigation?
- Have any insurance claims been filed in the past 5 years?
- What major repairs have been completed recently? What's planned?
- Are there any rental restrictions?
How Alpine Mortgage Helps Florida Condo Buyers
Florida's condo financing landscape is complex, but we specialize in finding solutions:
- Warrantability review: We verify building eligibility before you waste time on properties that won't finance
- Multiple lending partners: Access to conventional and Non-QM lenders for different situations
- Non-warrantable solutions: We finance condos other lenders reject, including buildings with pending compliance, high investor concentration and condotels
- Experience with complexity: We understand Florida's condo laws and lender requirements
Whether you're buying a beachfront high rise, a suburban low rise or a building that's been rejected by other lenders we can help you explore your options.
Steven Parangi is a licensed attorney and licensed mortgage loan originator (NMLS #76024) with over 20 years of experience in residential home lending. As the founder of Alpine Mortgage, Steven works directly with borrowers to review their mortgage options and assist them throughout the home financing process. Content published on AlpineBanker.com is reviewed regularly by Steven to reflect current lending guidelines and market conditions.
View full author profile →Florida Condo Mortgages FAQs
A SIRS is an engineering assessment that identifies a condo building's structural components and determines how much money must be reserved for their future repair or replacement. Florida law now requires SIRS for buildings 3+ habitable stories with reserves fully funded per the study's recommendations.
A milestone inspection is a structural inspection by a licensed engineer or architect required for Florida condo buildings 3+ stories. Coastal buildings (within 3 miles of water) must be inspected by age 25 and inland buildings by age 30. Re-inspection is required every 10 years thereafter.
A condo is non-warrantable if it doesn't meet Fannie Mae/Freddie Mac eligibility requirements. Common reasons in Florida include: incomplete SIRS, underfunded reserves, structural issues identified in inspections, pending litigation, high investor concentration, high delinquency rates or inadequate insurance.
Yes, but you'll need alternative financing such as portfolio loans or Non-QM loans. These typically require larger down payments (20-30%) and may have higher rates but they provide options when conventional financing isn't available.
Buildings under 3 habitable stories are exempt from milestone inspection and SIRS requirements. However, they still need adequate reserves and maintenance to qualify for financing and lenders may still scrutinize their financial health.
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