Buying a Condo in Florida? Important New Budget and Reserve Requirements Coming in 2027

What Florida condo buyers need to know about rising reserve requirements, special assessments, and changes that could make some condominium communities more difficult to finance.

If you're considering purchasing a condominium in Florida, there's an important change coming in 2027 that could affect your buying power, monthly expenses, and ability to obtain a mortgage.

Beginning January 4, 2027, Fannie Mae will increase its minimum condominium replacement reserve funding requirement from 10% to 15% of the association's annual budgeted assessment income for condominium projects undergoing a Full Review.

This is a significant change, particularly for Florida, where condominium associations are already navigating new inspection requirements, structural integrity reserve studies, rising insurance costs, and substantial maintenance expenses.

Understanding these changes before purchasing a condo could save you from unexpected expenses and financing complications.

1. The 15% Reserve Funding Requirement

Under the new Fannie Mae guidelines, condominium associations undergoing a Full Review will generally need to allocate at least 15% of their annual budgeted assessment income toward replacement reserves, up from the previous 10% requirement.

These reserves are intended to pay for major repairs and future replacements, including:

• Roof replacement and repairs.

• Exterior painting and building maintenance.

• Elevators and mechanical systems.

• Structural components and other major building improvements.

• Deferred maintenance and capital expenditures.

There is an important alternative: An association may qualify with a lower reserve allocation if it meets Fannie Mae's requirements for an acceptable reserve study and budgets the highest recommended reserve contribution identified in that study.

The reserve study cannot rely on the baseline funding method, which simply attempts to keep the reserve balance from falling below zero.

The practical impact? Associations that currently budget only 10% may need to increase reserve contributions, potentially resulting in higher monthly condominium fees or special assessments.

2. Florida's Structural Integrity and Reserve Requirements

Florida has already implemented significant condominium reforms following concerns about building safety and underfunded maintenance.

Among the most important requirements are:

Structural Integrity Reserve Studies (SIRS)

Generally, condominium associations must obtain a Structural Integrity Reserve Study for buildings that are three habitable stories or higher. These studies evaluate major building components and determine how much money should be set aside for future repairs and replacements.

For existing associations subject to the original deadline, the SIRS completion deadline was December 31, 2025. Studies must generally be updated at least every 10 years.

Mandatory Reserve Funding

For associations subject to SIRS requirements, Florida law generally prohibits owners from voting to waive or underfund reserves for the designated structural components.

This means associations must plan for significant future expenses instead of simply postponing maintenance.

Milestone Inspections

Qualifying condominium buildings must also undergo milestone inspections to evaluate structural safety. These inspections can identify necessary repairs that may create additional financial obligations for the association and its owners.

It's important to understand that Florida's SIRS requirements and Fannie Mae's reserve funding requirements are separate standards. Meeting one does not automatically mean a condominium qualifies for conventional mortgage financing.

3. Why Some Florida Condos Could Become Non-Warrantable

A condominium is generally considered warrantable when it meets the project eligibility requirements of conventional mortgage investors such as Fannie Mae and Freddie Mac.

When a condominium fails to meet applicable project eligibility requirements, it may be classified as non-warrantable.

Beginning in 2027, associations that cannot meet the new reserve funding requirement or the acceptable reserve study alternative could encounter additional financing difficulties.

Other issues can also affect a condominium's eligibility, including:

• Inadequate reserve funding.

• Significant deferred maintenance or critical structural repairs.

• Unresolved building inspection issues.

• Insurance deficiencies.

• Financial instability within the association.

• Certain pending litigation or other project eligibility concerns.

One important change has already taken effect: As of August 3, 2026, Fannie Mae retired its Limited Review process for established condominium projects. Most projects that previously qualified for this streamlined review must now undergo a Full Review unless they qualify for a waiver.

This means lenders are taking a closer look at association budgets, financial statements, insurance coverage, reserve studies, meeting minutes, and other condominium documentation.

The bottom line: A condominium that was easy to finance a year ago may be more difficult to finance today. Some communities may lose access to traditional conventional financing, reducing the number of eligible buyers and potentially affecting resale values.

4. Does Non-Warrantable Mean You Cannot Buy the Condo?

Absolutely not.

A non-warrantable condominium does not automatically mean a property is unfinanceable.

It means the buyer may need a different mortgage program and a lender experienced in evaluating condominium projects outside traditional conventional guidelines.

Depending on the property, association, borrower qualifications, and available lending programs, financing alternatives may include:

• Portfolio mortgage programs.

• Non-QM condominium financing.

• Specialized conventional alternatives where project review requirements can be satisfied through an applicable exception.

• Other lenders with more flexible condominium eligibility guidelines.

These programs can have different down payment requirements, interest rates, credit standards, and reserve requirements.

The challenge is finding the right financing program before committing to a purchase.

5. Why You Should Speak With a Condo Financing Specialist Before Buying

One of the biggest mistakes a Florida condo buyer can make is finding the perfect property, signing a contract, and only afterward discovering that the condominium association does not meet conventional lending requirements.

Before making an offer, buyers should consider having the condominium project reviewed for financing eligibility.

Important documents to investigate include:

• The association's current annual budget.

• Current reserve balances and reserve studies.

• Structural Integrity Reserve Study (SIRS).

• Milestone inspection reports, when applicable.

• Insurance policies and coverage.

• Recent association meeting minutes.

• Outstanding or anticipated special assessments.

Having these documents reviewed early can help identify potential financing problems before they jeopardize your transaction.

Need Financing for a Florida Condominium?

Meet The Lincoln Lender – Colton Murray

Not every condominium fits into the traditional mortgage guidelines, and not every lender knows how to navigate the exceptions.

As a Florida mortgage professional with First Premier Mortgage Lending, Colton Murray specializes in helping buyers explore financing solutions for challenging condominium projects, including non-warrantable condominiums.

His approach is simple: Find the financing solution that fits the property and the buyer, rather than automatically turning away a transaction because a condominium does not meet conventional guidelines.

Whether you're purchasing a primary residence, a second home, or an investment property, The Lincoln Lender can help evaluate your options.

Don't let a non-warrantable condominium stop you from purchasing the property you want.

Before you walk away from a condo because another lender says it cannot be financed, let The Lincoln Lender take a look.

Colton Murray | The Lincoln Lender
First Premier Mortgage Lending
Serving Naples, Marco Island, Bonita Springs, Fort Myers, and surrounding Southwest Florida communities.

Steering You Clear into Close.

Mortgage financing is subject to borrower qualifications, property eligibility, lender guidelines, and program availability. Not all condominium projects qualify for alternative financing. This article is for informational purposes and is not legal, tax, or financial advice.