Florida Condo Buying Guide

Warrantability is the lender's determination that a condo project meets Fannie Mae or Freddie Mac guidelines and can be sold on the secondary market. A warrantable condo qualifies for conventional financing with standard down payments and interest rates. Non-warrantable condos — those that fail one or more guidelines — require portfolio lenders and typically come with higher rates, larger down payments (20–30%), and fewer loan options. Common reasons a condo becomes non-warrantable include: more than 35% of units owned by a single investor, more than 35% of the building used for commercial purposes, active litigation involving the HOA, low owner-occupancy rates, or significant deferred maintenance.

FHA loans require the condo project to be on the FHA-approved list maintained by HUD. FHA approval means the project has met specific occupancy, financial, and insurance standards. Approved buildings allow buyers to use FHA's 3.5% down payment — a significant advantage for first-time buyers in South Florida's high-priced markets. You can search for FHA-approved condo projects at the HUD website. Not all buildings apply for or maintain FHA approval, so your choices may be more limited. Single-unit approvals (spot approvals) are also available for individual units in non-approved projects if the project meets certain eligibility criteria.

South Florida's condo market — Miami, Fort Lauderdale, and the Palm Beaches — is among the most active in the country. High-rise condos along the coast often have higher HOA fees due to insurance costs, building maintenance, and amenity expenses. After the 2021 Surfside collapse, Florida enacted stricter building inspection laws (SB 4D) requiring milestone structural inspections and funded reserve accounts for buildings three stories or taller. These new reserve requirements have caused HOA fees to rise significantly in many older buildings, which affects buyer affordability and lender qualification. Always confirm the building's compliance with these new laws before making an offer.

The condo buying process in Florida follows the same broad steps as any home purchase, with a few important additions. First, get pre-approved with a lender who has condo experience. Second, identify buildings that are already on the FHA or Fannie Mae approved list if you plan to use those loan types. Third, once under contract, your lender will order a condo questionnaire from the HOA — a document that discloses ownership percentages, litigation, delinquency rates, and insurance coverage. Fourth, review the HOA documents carefully with your real estate attorney. Fifth, confirm the building's SB 4D compliance status. Sixth, secure your HO-6 insurance policy. Finally, close and move in knowing the building's financial and structural health has been vetted.