Articles

Non-Warrantable Condos in Florida: What It Means and How Financing Works

By Neil Bourdelaise, NMLS #476326 · November 4, 2026

Non-warrantable sounds scary. It isn't. It's one of the most common things I hear from buyers in South Florida, and most of the time it's a building problem, not a buyer problem. Here's what it means and what to do about it.

What "non-warrantable" actually means

Warrantable means the building meets Fannie Mae and Freddie Mac guidelines. Non-warrantable means it doesn't. That's it. It's a label on the building, not on you.

Most lenders sell their loans to Fannie Mae and Freddie Mac. If a building falls outside those guidelines, those lenders can't close the loan, so they tell you the building "doesn't qualify." What they really mean is it doesn't fit their box.

A building can be well run, in great shape, with money in the bank, and still be non-warrantable. I get those calls all the time. A good building and a warrantable building are two different things.

The most common reasons a Florida building is non-warrantable

• Pending litigation. This is the biggest one I see. It can be the HOA suing the developer, an insurance dispute, or a slip-and-fall case. Lenders want to know what the lawsuit is about before they lend.
• Low reserves. The association doesn't have enough set aside for repairs.
• High investor ownership. Too many units owned by investors instead of people living there.
• Too much commercial space. Retail or office space that's large compared to the residential side.
• Hotel-style operations. Short-term rentals, a front desk, a rental program. This is big in South Florida, and those buildings are called condotels.
• One owner holding a lot of units. A single person or company owning a big share of the building.

Florida adds its own layer. After the 2021 Surfside collapse, the state required milestone structural inspections for older buildings three stories and taller, and required associations to fund structural reserves instead of waiving them. Buildings that are behind on inspections, repairs or reserves can be harder to finance and may carry special assessments.

So how do you finance one?

You need a lender with portfolio programs. Those are loans the lender keeps instead of selling to Fannie Mae or Freddie Mac. Because they keep the loan, they can look at the building on its own terms and decide whether the risk makes sense.

That's what we do. We look at two things: the building and the borrower. Many lenders only look at the building, and that's where they drop the ball.

Here's a real one. A client called after another lender told them the building didn't qualify. Nobody had financed a closing in that building in over six months, which is normally a bad sign. We dug in. There was litigation, but it was mainly one unit owner suing the unit below and the HOA. The building itself was in great shape, and the buyer was strong: perfect credit, a lot of assets and a decent down payment. We used a portfolio loan that understood the building and the lawsuit, and we closed in two weeks. To this day, we're the only financed deal in that building.

Every building and every borrower is different, so that won't be every story. But "doesn't qualify" is not always the final answer.

What changes on a non-warrantable loan

Plan on a larger down payment than a standard condo loan. The low down payment programs you see advertised aren't available on non-warrantable condos. Terms are different too, so we'll walk you through what your options look like for your specific building before you're committed.

What to do if your lender just said no

Ask three questions:

1. Which item failed the building?
2. Was it actually the building, or was it my profile?
3. Is it in writing?

Then check your financing contingency. In Florida, this is very important. If you pass that date, the seller doesn't care whether the building qualifies or you do. You could lose your earnest money. Talk to your agent, get the date in writing, and if we need an extension, we'll ask for it right away so we have time to underwrite your file.

What to send me

Easy. Send the building name, your sales contract and any reason the other lender gave for the denial. If there's a lawsuit, send the litigation summary too. I'll review it and tell you where things stand. Better yet, send me the building name before you write the offer, so you know early whether it will finance.

Common questions