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Own Luxury Homes® FL Condo Lender Restriction Index™
Own Luxury Homes® FL Condo Lender Restriction Index™: Fannie Mae and Freddie Mac maintain lists of FL condo buildings ineligible for conventional conforming loans. Fannie Mae expanded FL condo review in January 2022 post-Surfside. 6 restriction triggers: deferred maintenance, SIRS not completed, large special assessment, reserve underfunding, construction defect litigation, HOA 15%+ delinquency. Restricted buildings: cash-only or portfolio/non-QM financing only. Pre-offer lender eligibility check is mandatory for any FL condo purchase. Own Luxury Homes® 12-Point Agent Integrity Audit™. See also: Florida Roof Insurance Penalty Index™.
Own Luxury Homes® FL Condo Lender Restriction Index™
The single most financially consequential outcome of the Surfside reform for Florida condo buyers is not the special assessment risk — it is the lender restriction list. Fannie Mae and Freddie Mac maintain lists of Florida (and nationwide) condo buildings flagged as ineligible for conventional conforming mortgages. A buyer who makes an offer on a Fannie/Freddie-restricted building, gets through the inspection period, and then discovers their lender cannot proceed is in a contract they cannot complete without cash. This Index explains the restriction framework, how to check a building’s status, and what options exist for restricted-building buyers.
01 — Fannie Mae / Freddie Mac Condo Restriction Categories
| Restriction Type | Trigger | Impact on Financing | Resolution Path |
|---|---|---|---|
| Significant deferred maintenance / unsafe conditions | Building has visible structural, electrical, or mechanical deficiencies that pose safety risk; or failed milestone inspection | Conventional conforming financing: UNAVAILABLE. FHA/VA: also often unavailable. | Complete required repairs and document completion to GSE satisfaction; provide engineer letter of remediation |
| SIRS not completed by deadline | Association failed to complete required SIRS by Dec 31, 2024 | Many lenders requiring SIRS documentation; some declining without it | Complete the SIRS and provide to lender; in most cases resolves the restriction |
| Special assessment exceeding threshold | Pending or recent special assessment exceeds 1% of appraised value per some lender guidelines, or $5,000 per unit per others | Variable by lender; some decline; some proceed with enhanced documentation | Buyer can pay into escrow; provide documentation of assessment purpose and scope |
| Reserve funding below minimum | Reserves below 10% of the annual budget (Fannie guideline) or below SIRS-required funded percentage | Fannie Mae restriction likely; some lenders declining all financing on buildings below certain funding levels | Association must increase reserves; cannot be resolved by a single buyer |
| Litigation (construction defect) | Association has active pending litigation against the developer or general contractor for construction defects | Some lenders proceed; others decline until resolved; FHA: generally declines active litigation | Resolution requires settlement or dismissal of litigation; buyer cannot force resolution |
| HOA delinquency rate | More than 15% of units are delinquent in HOA dues (Fannie guideline) | Conventional financing restricted; indicates financial stress in the association | Association must collect delinquent dues; cannot be resolved by single buyer |
02 — How to Check a Building Before Making an Offer
Step 1: Before making any offer on a FL condo, provide your lender with the building’s address and HOA name and ask them to run a condo eligibility check through Fannie Mae’s CPM system (Condo Project Manager) and Freddie Mac’s CPA (Condo and PUD Advisor).
Step 2: If the building is flagged as "Unavailable" or "Ineligible," ask your lender why and what documentation would resolve the restriction. Some restrictions are temporary and documentation-dependent; others are structural and unresolvable by the buyer.
Step 3: If the building is restricted for conforming financing, explore portfolio lenders (local banks and credit unions that hold loans on their own books) and non-QM lenders who are not bound by GSE guidelines.
Step 4: If no conventional or portfolio financing is available and you are not a cash buyer, do not make an offer on that building. A restricted building at a 25% discount is not a deal if you cannot finance it.
Brown, Ryan. “Own Luxury Homes® FL Condo Lender Restriction Index™.” Own Luxury Homes®. https://www.ownluxuryhomes.com/markets/florida/research-indices/florida-condo-lender-restriction-indexMedia: ownluxuryhomes.com/connect · 407-900-7030
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)