Condos make up a big share of the homes for sale in Pinellas County and across Tampa Bay, and for many buyers they're the most realistic way into the market. But a condo loan isn't the same as a single-family home loan. With a condo, the lender isn't just evaluating you and the unit. They're also evaluating the building, the association, and its finances.
The first time a buyer hears the word "non-warrantable," it can sound alarming. It doesn't have to be. Here's what it means, what lenders look at, and how to avoid surprises after you've fallen in love with a unit.
What "Warrantable" Actually Means
A warrantable condo is one that meets the guidelines of the agencies behind most conventional loans, Fannie Mae and Freddie Mac. If a project meets those guidelines, loans on units in it can generally be sold to those agencies, which is why lenders are comfortable making them.
A non-warrantable condo is simply one that doesn't meet one or more of those guidelines. That doesn't mean the building is bad or that you can't buy there. It means standard conventional financing may not be available, and you may need a different loan program.
What Lenders Look at in the Building
When I review a condo purchase, I'm looking at the project as a whole. Common items include:
- Owner-occupancy mix. Buildings with a very high share of investor-owned or second-home units can be a concern for some programs.
- Concentration of ownership. If one person or entity owns a large number of units, that can affect eligibility.
- Commercial space. Ground-floor retail or other commercial use can matter, depending on how much of the building it represents.
- Pending litigation. Certain lawsuits involving the association can make a project ineligible for standard financing.
- Delinquent dues. If a significant portion of owners are behind on association fees, the association's budget can be strained, and lenders pay attention to that.
- Budget and reserves. Lenders want to see that the association is collecting enough to maintain the building and that it's setting money aside for future repairs.
- Insurance coverage. The association's master policy needs to meet program requirements, and in Florida that's a topic of its own.
- Special assessments. A planned or pending special assessment, a one-time charge to owners for a major expense, can affect the file.
Many of these answers come from a condo questionnaire the association's management completes for the lender. A slow or incomplete questionnaire is one of the most common reasons condo closings get delayed, so I recommend asking early.
How Florida's Condo Laws Changed the Picture
After the Surfside collapse in 2021, Florida passed new laws aimed at building safety and association finances. For buyers, the practical effects include:
- Milestone inspections. Condo and cooperative buildings of a certain height and age must have structural inspections performed at set intervals. The first inspection is generally due when a building reaches a certain age, and the timeline can be shorter for buildings near the coast.
- Structural integrity reserve studies. Associations are required to study the condition of major structural components and plan for the cost of future repairs.
- Stricter reserve funding. Associations have had less room to waive or reduce reserves for the structural items covered by these studies.
As a result, dues and special assessments have risen at many buildings, and some associations are still catching up on required inspections and studies. Lenders may ask for documentation of completed inspections, reserve studies, and repair plans, and a building that's behind on any of this can be harder to finance.
I'm not an attorney, so for how these laws apply to a particular building, your real estate attorney or the association itself is the best source.
Your Loan Options by Condo Type
The right program depends on how the building is classified and what you need.
| Situation | Programs that may be worth exploring |
|---|---|
| Warrantable condo | Conventional loans, and potentially FHA or VA if the building is approved |
| Condo not on the FHA approved list | Conventional, if the project is warrantable; some buildings may be eligible for a single-unit approval process |
| Non-warrantable condo | Non-QM programs designed for properties that fall outside agency guidelines |
| Investment or second-home condo | Conventional or non-QM, depending on the building and the borrower |
A few notes on these:
- FHA and VA both have their own condo approval processes. The building generally needs to be on an approved list, or it may qualify through a separate review. Not every building is, so check early, ideally before you make an offer.
- Non-QM loans are a category of mortgages that don't follow standard agency guidelines. They can be a useful option for a non-warrantable condo, though they often come with different terms, such as a larger down payment or a different pricing structure. I'm happy to explain the trade-offs for your situation.
- Condo-hotels and similar properties with rental programs or short-term-rental features often fall into their own category and may have narrower options.
If you're a self-employed buyer, a non-QM option may also help on the income side, which I cover on the self-employed page.
Questions to Ask Before You Write an Offer
You don't need to become a condo expert, but a few questions can save you real trouble:
- What are the current dues, and what do they cover? Ask for the budget.
- Are there any planned or pending special assessments?
- Has the building completed its required milestone inspection and reserve study, if applicable?
- Is the association involved in any litigation?
- What is the building's current approval status for FHA or VA?
- What percentage of units are owner-occupied?
Your agent can usually get answers to most of these from the association or listing. I can then check them against what your loan program requires so we find problems before you're under contract, not after.
Don't Forget Insurance
Condo owners in Florida typically carry their own policy for the interior of the unit, contents, and liability, and the association carries a master policy for the building. Because Florida insurance costs and availability have been a challenge for many associations, the building's coverage is something I look at closely. Depending on the property's location, flood coverage may also come into the picture. Start insurance quotes as soon as you're under contract, since your lender will need proof of coverage before closing.
Plan for the Full Monthly Picture
Association dues are part of your monthly housing costs, and lenders include them when evaluating your debt-to-income ratio. That means the same unit can look very different to a lender depending on its dues, so it's smart to ask about them before you get attached to a particular building. If you want to compare how dues might fit your budget, we can go through it together. For market pricing, visit current rates.
If you're still earlier in the process, my post on Florida closing costs covers what to budget beyond the purchase price, and the FHA vs. conventional comparison can help you think through loan types.
Your Next Step
If you're looking at a condo in Pinellas County, Tampa Bay, or anywhere in Florida, talk to me before you make an offer. I can look at the building, tell you what financing it may qualify for, and flag any red flags early. Schedule a free consultation and we'll map out your options together.
Have Questions About Your Situation?
Don't guess — let's look at the actual numbers together. I'll walk through your options and show you exactly what each one would cost you, both today and over time.