Complete Condo Loan Guide
Written by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A condo loan is a mortgage on a condominium, which requires approving both you and the condo project. With condos making up a large share of Florida housing, knowing how condo financing works is essential.
This guide explains warrantable versus non-warrantable condos, the loans available, and Florida's tightened condo rules. Mortgage Capital, NMLS# 1859012, finances condos across Florida.
Why condo loans are different
On a condo, the lender approves you and the building. They review the association's budget, reserves, owner-occupancy ratio, insurance, and any litigation before lending.
A strong borrower can be denied because of the project, so the building's health matters as much as your own qualification.
Warrantable condos
A warrantable condo meets Fannie Mae and Freddie Mac standards, qualifying for conventional financing at standard rates. Most well-run, owner-occupied buildings are warrantable.
FHA and VA also maintain approved condo lists and offer single-unit approval for buildings not on the list.
Non-warrantable condos
A non-warrantable condo fails an agency test, such as too many rentals, heavy commercial space, thin reserves, or ongoing litigation. These finance through portfolio and non-QM lenders.
Expect a higher rate and a larger down payment, but financing is available where standard loans will not go.
Florida condo rules
After recent building safety failures, Florida tightened inspection and reserve requirements for older condos. Buildings that have not completed milestone inspections or funded reserves can be harder to finance.
Special assessments and underfunded reserves are now closely watched by lenders, so review the association's finances before buying.
Doing your homework
Request the budget, reserve study, meeting minutes, insurance, and assessment history. Healthy reserves and stable dues signal a building that will finance smoothly and hold value.
We confirm a project's lending status before you write an offer so you do not pay for an inspection on an unfinanceable unit.
Complete Condo Loan Guide: step by step
Frequently asked questions
Why is getting a condo loan harder?
The lender approves both you and the building, reviewing the association's finances, reserves, occupancy, and litigation.
What is a warrantable condo?
A condo meeting Fannie Mae and Freddie Mac standards, eligible for conventional financing at standard rates.
What is a non-warrantable condo?
A condo that fails an agency test, like too many rentals or thin reserves, financed through portfolio or non-QM loans.
Can I get an FHA loan on a condo?
Yes, if the project is FHA-approved or qualifies through single-unit approval.
How do Florida laws affect condo loans?
Tighter inspection and reserve rules mean buildings that have not completed inspections or funded reserves can be harder to finance.
How much down payment for a condo?
3.5% on FHA approved condos, 3% to 5% on warrantable conventional, and 20%-plus on non-warrantable financing.
What documents should I review before buying?
The budget, reserve study, insurance, meeting minutes, and any special assessment history.
Why was my condo loan denied?
Likely the building failed a lender test rather than you. Project approval is separate from borrower approval.