What Orlando Condo Buyers Must Check Before Making an Offer
Post-Surfside legislation and Fannie Mae's updated warrantability rules have quietly put a share of Orange County's older condo inventory off-limits for conventional loans. Here's how to vet a buil…
Post-Surfside legislation and Fannie Mae’s updated warrantability rules have quietly put a share of Orange County’s older condo inventory off-limits for conventional loans. Here’s how to vet a building before you write a check.
If you’ve been shopping condos in Orlando this summer, you’ve probably noticed a particular kind of silence from your agent or lender when you ask whether a specific building is “financeable.” That pause has a reason.
Florida structural-safety law and tightened Fannie Mae project-eligibility standards have removed a meaningful slice of Orange County’s older condo inventory from the conventional-financing market. Some buildings that passed lender review without issue in 2022 are being flagged today. Others are about to be.
This isn’t a story about bad credit or tight money. It’s a story about buildings. About concrete. About deferred reserves and a regulatory framework that changed after 98 people died when Champlain Towers South partially collapsed in Surfside in June 2021.
Here’s what buyers need to understand before they write an offer this season.
Why 2026 Is a Different Condo Market Than Three Years Ago
The Surfside collapse prompted two overlapping responses that are reshaping what it means to buy a condominium in Florida.
The first was state legislative action: Florida SB 4-D, signed by Governor DeSantis in May 2022, created mandatory structural milestone inspections and eliminated the longstanding ability of condo associations to waive full reserve funding through a membership vote. The second was federal: Fannie Mae’s Selling Guide update SEL 2021-08, issued immediately after Surfside, expanded the conditions under which a condo building is deemed ineligible for conventional financing.
Three years ago, many of these requirements were still in their grace periods. Not anymore.
The reserve-waiver loophole that allowed Florida HOAs to cut their reserve funds by a member vote closed January 1, 2025. Milestone inspection deadlines have passed or are imminent for buildings built before 1990. Lenders selling loans into the secondary market now check for compliance as part of project review — and they’re denying projects that would have cleared without comment in 2022.
Here’s the part that catches buyers off guard: a building can have fresh paint, a renovated pool deck, and a professional management company and still be unwarrantable because the reserve account holds sixty cents on the dollar of what a Structural Integrity Reserve Study says it should. An engineer’s Phase 1 inspection can turn up something that triggers Phase 2, and nobody told the buyers. The risk is invisible from a well-maintained lobby.
What Florida SB 4-D Actually Requires and Which Orlando Buildings Are on the Clock
Florida SB 4-D created a milestone inspection framework for residential condo buildings three stories or taller. Once a building reaches 30 years of age, the association must complete a Phase 1 milestone inspection conducted by a licensed engineer or architect, evaluating the building’s overall structural condition.
If Phase 1 finds “substantial structural deterioration,” the association moves to Phase 2. That’s where invasive testing happens: opening walls, probing concrete, exposing embedded steel. It’s expensive, disruptive, and not something any HOA board wants to manage. Plenty of them have tried to postpone it. Under current law, postponement isn’t legal.
Buildings that turned 30 by December 31, 2024 were required to have their Phase 1 inspection underway by that date. Buildings crossing that threshold in subsequent years must meet the deadline within the calendar year they age into it. An association that hasn’t completed the required inspection is in violation of state law — and under current Fannie Mae guidance, that puts it in a category that makes conventional financing unavailable for unit sales until the inspection is completed and any required repairs are addressed.
For Orlando buyers, the exposure is concentrated in specific submarkets and construction vintages.
Downtown Orlando’s 32801 ZIP has several mid-rise buildings from the early-to-mid 1980s squarely in milestone territory. College Park (32804) and Conway (32812) have clusters of three-story walk-up condo communities originally built as apartments in the late 1970s and converted in subsequent decades. The Ventura/Hoffner corridor in 32822 and the Conroy Road corridor in western Orange County are dense with 1970s and 1980s construction — wood-frame and concrete-block walk-ups where the inspection requirement has either just triggered or will within the next year.
Alongside the inspection framework sits the Structural Integrity Reserve Study mandate. An SIRS is a detailed engineering assessment of the major structural and life-safety components of a building — not just the amenities and common-area cosmetics that traditional reserve studies covered — with a funding schedule attached. Florida law now requires HOAs subject to SB 4-D to fund reserves based on SIRS findings, with no ability to opt out.
This reverses decades of Florida practice. Associations used to waive full reserve funding by a majority vote of members. Many did, routinely, for years. It was perfectly legal to kick the can on capital repairs, and a lot of boards did exactly that. Those decisions are arriving as bills now.
How Fannie Mae and Freddie Mac Decide Whether a Building Can Be Financed
Warrantability is not a judgment on the borrower. A buyer with a 780 credit score, 20 percent down, and a year of reserves in the bank can be fully qualified and still be denied a conventional mortgage because the building failed project-level eligibility review. I keep returning to this because it genuinely surprises people — the problem has nothing to do with you personally.
Fannie Mae’s current guidance, consolidated in SEL 2021-08 and updated in subsequent selling guide bulletins, identifies several specific conditions that make a condo project ineligible. Each one has a concrete meaning.
Pending or incomplete critical repairs: If a building has been flagged by a licensed engineer or an inspection report as having significant deferred maintenance or structural concerns, and those repairs haven’t been completed or funded, the project is ineligible. “Flagged” includes anything documented in HOA meeting minutes, an engineer’s report, or a disclosure to unit owners. If it was written down, a lender’s project reviewer will eventually find it.
Special assessments tied to structural or safety issues: A special assessment for pool resurfacing or new signage is unlikely to create a warrantability problem by itself. A special assessment to repair failing balcony railings, address water intrusion into structural members, or remediate anything identified in a milestone inspection is a near-automatic conventional-financing disqualifier under current guidance. The purpose of the assessment matters enormously — and it’s documented in the board resolution authorizing it.
Reserve funding below 10 percent of the total annual budget: This is a floor, not a standard. An association whose reserve line item represents less than 10 percent of its operating budget fails on this threshold alone. Many older Orlando associations — particularly those that exercised the waiver option for years before it was eliminated — are in or near this zone right now.
Investor-unit concentration above 35 percent: If more than 35 percent of units are investor-owned (non-owner-occupied), the project doesn’t meet standard agency requirements. This is a serious issue in the Orlando tourism belt. Complexes near International Drive and along US-192 in the Kissimmee corridor were built for or evolved toward investor ownership, and many carry ratios well above Fannie’s threshold. Buyers shopping what they think is a normal suburban complex sometimes discover the investor-concentration problem only after the lender runs the project review. That’s a genuinely unpleasant moment.
Single-entity ownership above 10 percent of units: If one person, LLC, or entity owns more than 10 percent of the units, that concentration alone renders the project non-warrantable. This comes up regularly in smaller condo communities. A 20-unit building where one investor owns three units exceeds the threshold. Do that math before you get attached to a unit in a small complex.
Two categories of Orlando inventory deserve particular attention.
First, the apartment-to-condo conversions from the 2004–2007 housing boom. Complexes built as rental apartments in the late 1980s and 1990s were converted to for-sale condominiums when land values made conversion profitable. Many are now 30-plus years old, entering their first serious capital-expenditure cycle — roof replacement, elevator overhaul, concrete restoration. They came into the for-sale market carrying investor-concentration ratios from the conversion era, and now they face structural-age triggers simultaneously. It’s a rough combination, and there’s no clean fix for it.
Second, the short-term rental concentration problem. Buildings where a significant share of units are actively listed on Airbnb or VRBO may trigger HOA document language that lenders flag. The operating history on heavily rented units also tends to show deferred maintenance, which makes sense if you think about the wear on a unit rented out 200 nights a year.
How to Find Out If a Building Is on a Lender’s Restricted List Before You Make an Offer
The most important practical question in this piece has one annoying limitation baked into the answer: Fannie Mae’s Condo Project Manager tool, the central database tracking project-level approvals and flags, is lender-facing. Buyers can’t access it directly.
What you can do is ask your lender to run it before you write an offer. Not after. Before.
Ask your mortgage professional specifically to look up the project in Fannie Mae’s CPM and report back the project status. The outcomes that matter most: “unavailable for delivery” means conventional financing is blocked regardless of how strong your application is. “Approved” or “expedited review” status means the project is currently in good standing with the agency.
“Unavailable for delivery” doesn’t kill the deal. It means you need either a portfolio loan from a lender that holds its own paper, or cash.
Portfolio lenders — regional banks and credit unions that don’t sell their loans to Fannie or Freddie — lend on non-warrantable condos, but at higher rates and stricter loan-to-value requirements than conforming loans. Several institutions active in Orange County maintain portfolio condo products. CFE Federal Credit Union and Addition Financial have both been active in this space; your mortgage broker should be able to tell you which lenders are currently closing these deals in Orange County and at what terms. Ask directly. If your lender can’t answer, find one who can.
One more wrinkle: individual lenders add their own standards on top of agency guidance. A building that technically clears Fannie’s threshold can still be declined by a specific lender with an internal policy — say, no buildings over 30 years old without a completed SIRS, regardless of agency status. A clean CPM result doesn’t guarantee every lender will extend financing. Run the question by your lender explicitly, not just generally.
The Florida Department of Business and Professional Regulation maintains public records on homeowners’ associations, including annual filings and complaint histories. For any building you’re considering in Orange County built before 1995, search the association by address at the DBPR public records portal. Complaints lodged by unit owners about reserve funding, board governance, or deferred maintenance are public record. A cluster of recent complaints warrants a hard look before you submit an offer.
The Special Assessment Question and When a Pending Assessment Kills a Mortgage
If you’re already under contract, or close to it, this question is urgent. Fannie Mae’s current guidance treats special assessments differently depending on their nature and amount. A pending assessment of more than $1,000 per unit triggers a mandatory deeper lender review.
More importantly: a pending assessment tied to structural or safety repairs — balconies, roofing systems, load-bearing elements, waterproofing of structural components, anything connected to a milestone inspection finding — is, under current interpretation, a near-automatic disqualifier for conventional financing.
The distinction is critical, and it lives in the HOA documents.
An HOA levying a special assessment to resurface the parking lot or add an outdoor kitchen to the pool area is unlikely to kill a conventional loan on its own. An HOA levying a special assessment because a Phase 1 milestone inspection turned up cracked post-tensioned cables in the parking structure, and the association doesn’t have reserves to cover it, is a fundamentally different situation. Lenders treat them differently. The board resolution authorizing the assessment will state the purpose — that’s the document you need to read.
The practical problem is that HOAs aren’t always forthcoming about pending assessments in seller disclosures. Florida law requires sellers to disclose assessments they know about, but enforcement is imperfect and the timing of disclosure isn’t always buyer-friendly. Sellers may not even know what the board is preparing to announce; the association management company will.
This is one of the reasons the document checklist below should be requested before an offer is submitted, not during the inspection period. By the time you’re in the inspection window, you may have already lost leverage you didn’t know you had.
The HOA Document Checklist — Thirteen Things to Request Before You Write an Offer
A local real estate attorney putting together a condo-specific addendum for an Orange County buyer would, at minimum, require the seller to produce the following before contract execution or within the earliest window of the review period.
Most recent reserve study (within the past three years). This tells you how funded the association’s reserves are as a percentage of the total recommended amount. Below 50 percent fully funded is a serious lender concern in buildings over 20 years old. Below 25 percent is a near-automatic disqualifier.
Structural Integrity Reserve Study (SIRS), if the building is three or more stories and 30 or more years old. State law requires this. Its absence in an eligible building is a compliance problem and a lender flag.
Phase 1 milestone inspection report, if applicable. Required for buildings meeting the age and height threshold. If the building qualifies and no report exists or is in progress, the association is in violation of Florida law.
Phase 2 milestone inspection report, if Phase 1 identified substantial structural deterioration. If Phase 2 was triggered, you need to know what it found and what remediation will cost.
Twelve months of board meeting minutes and any membership meeting minutes within that period. This is the document sellers’ agents most prefer buyers not read carefully. Deferred maintenance, inspection findings, pending litigation, and upcoming special assessments all show up in board minutes. Read all of them.
Current HOA operating budget and most recent year-end financial statement. Look specifically at the reserve line item as a percentage of total budget — the 10 percent floor Fannie Mae applies — and at whether the association is running a surplus or deficit.
Certificate of insurance with structural coverage noted. Lenders require fidelity coverage and property insurance meeting specific standards. Gaps in structural coverage can create warrantability issues independent of everything else on this list.
Disclosure of any pending or anticipated special assessments. This must be in writing from the association, not just from the seller.
Disclosure of any pending litigation involving the association. An HOA suing its contractor over construction defects, or being sued by a unit owner over habitability, can be ineligible for conventional financing under Fannie’s project guidelines.
Current owner-occupancy ratio. What percentage of units are owner-occupied versus investor-owned, as of the most recent HOA annual disclosure. The 35 percent investor-concentration limit applies per building.
Confirmation that no single entity owns more than 10 percent of units. In smaller complexes of 20 to 40 units, this threshold is easier to breach than buyers expect.
Current delinquency rate on HOA dues. A complex with chronic collection problems usually has reserve-funding problems downstream. Ask the association management company for the current percentage of units more than 60 days past due.
Any engineering or inspection reports produced within the past five years. A catch-all for reports commissioned privately — by the association, prior buyers, or a property manager — that may document conditions not visible in the standard disclosure set.
What Your Contract Should Say and Why Generic FAR/BAR Language May Not Protect Your Deposit
The standard Florida residential contract — the FAR/BAR AS IS Residential Contract — has a financing contingency in Paragraph 8. That contingency is written around the borrower’s ability to obtain a loan. It covers the scenario where your lender won’t approve you because of your income, debt, or credit.
It was not written with project-level ineligibility in mind.
Here’s the exposure: if a building fails Fannie Mae’s warrantability review after your inspection period has closed, and you can’t close because no conventional lender will touch the project, you may not be automatically entitled to your earnest money back under standard contract language. The seller’s attorney may argue that the financing contingency expired when the inspection period ended, that you had sufficient time to investigate the building’s financing eligibility, and that the failure isn’t covered by the contingency as written.
This is happening in Orange County transactions right now. Not hypothetically.
The protection is a condo-specific addendum, drafted or reviewed by your own attorney, that does several things explicitly: states that the financing contingency covers lender denial due to project ineligibility or non-warrantability (not just borrower-qualification denial); defines a specific cure period during which the seller or HOA can take corrective action if possible; and establishes a clear deposit-return trigger if the project is determined ineligible for conventional financing through no fault of the borrower.
Orlando-area real estate law firms that handle buyer-side transaction work can produce this addendum. The cost of an hour of attorney time is a fraction of what a lost earnest deposit costs. Ask for it before going under contract on any condo unit built before 2000. For buyers navigating this kind of legal complexity, our moving & real estate coverage tracks other Orange County purchase issues worth knowing before you go under contract.
The Orlando Buildings Most Likely to Trigger a Lender Flag in 2026
What follows is drawn from conversations with active Orange County real estate professionals and mortgage brokers, combined with publicly available information. Where CityDesk is still seeking confirmation or comment, that’s noted explicitly.
Downtown Orlando high-rises in the 32801 ZIP include several mid-rise and high-rise condo buildings constructed in the 1980s — old enough to be in or entering milestone inspection territory, with reserve-funding histories that varied significantly by building. Active agents working the downtown market have reported that lender appetite on pre-1990 buildings in this ZIP is noticeably more cautious than two years ago. That’s showing up in actual transaction timelines, not just anecdote.
Landmark Towers, a downtown Orlando residential mid-rise with units that trade regularly, is among the buildings CityDesk is seeking comment on from agents who have transacted there recently. We haven’t received documentation of a specific warrantability determination and will update this piece when we do.
The MetroWest corridor is a second concentration of concern. Multiple complexes there — built as apartment communities in the late 1980s and early 1990s and converted to for-sale condominiums during the mid-2000s boom — are now in their first serious capital-expenditure cycle. Agents working this corridor have reported investor-concentration ratios exceeding Fannie’s 35 percent cap in at least some buildings, compounded by the structural-age questions that come with 30-plus-year-old construction. Portfolio-loan alternatives at the price points common in this corridor are more limited than they are for buyers at higher price tiers. That’s a real constraint for buyers who can’t shop rates aggressively.
Walk-up condo communities from the 1970s and 1980s in the Conroy Road corridor are squarely in milestone inspection territory. The buildings are typically two and three stories — the three-story threshold triggers the state inspection requirement — and many were developed as affordable condo product with the minimal reserve structure that was legal and common at the time. The people who live in these communities face a genuinely difficult situation: the buildings need capital investment, but building adequate reserves requires assessments that owners on fixed or modest incomes can’t easily absorb. That tension is real, and it doesn’t have a clean resolution. It also creates real financing risk for buyers, which is worth stating plainly.
The Williamsburg corridor, near the Orange/Osceola County line, presents a different risk. The density of short-term rental activity in this area — particularly in communities with lake access or proximity to theme-park corridors — reportedly pushes investor-unit concentration past warrantability thresholds in multiple complexes. Buyers considering condos in this submarket should run the CPM lookup before any offer is submitted and pay particular attention to the owner-occupancy disclosure in the HOA documents.
For context: a buyer purchasing a unit in a Baldwin Park mid-rise or another post-2010 building faces lower risk on the structural-age and reserve-funding dimensions. The lender-flag risk is concentrated in older inventory. Newer buildings aren’t automatically problem-free, but the age-related triggers largely don’t apply. Buyers comparing neighborhoods on budget and risk profile will find the Lake Nona vs. Dr. Phillips neighborhood comparison a useful parallel read on how submarket differences translate to real purchase decisions.
What to Do If You’re Already Under Contract on a Building That Just Failed Warrantability Review
If your lender just told you the building doesn’t pass project review, move fast. Here’s the sequence.
Get the specific reason in writing. “The building is non-warrantable” is not sufficient. You need to know whether the problem is reserve funding, a pending assessment, investor concentration, an inspection finding, or something else. The specific reason determines your options.
Ask whether the problem is fixable before closing. A reserve-funding shortfall at 8 percent of budget rather than 10 percent is a different kind of problem than a pending special assessment for structural repairs. Some deficiencies can be addressed with HOA documentation or board resolutions within a short timeframe. Others cannot.
Contact a local attorney immediately to evaluate your contract language. This is where the question of your earnest money deposit becomes concrete. If your contract includes the condo-specific addendum language described above, you likely have a path to recovery. If you’re relying solely on the standard FAR/BAR financing contingency, you need an attorney’s assessment of your position before you do anything else.
Ask your lender about portfolio-loan alternatives and get a rate quote. If the building is otherwise solid but doesn’t meet agency standards on investor concentration or reserve percentage, a portfolio lender may still finance the purchase — at different terms. Know the rate, the loan-to-value requirement, and the monthly payment difference before you decide whether to proceed.
If you’re exiting the contract, follow the exit procedure your contract specifies and do it within any applicable cure period. Do not stop responding or assume the contingency is self-executing. Florida courts haven’t treated non-warrantability as an automatic get-out-free scenario under standard contract language, and procedural missteps can complicate deposit recovery even where you have a substantive argument.
Orlando’s condo market this summer has more inventory than it’s had in several years, and prices in many submarkets have softened from their 2022 peaks. That creates real buying opportunities. It also creates conditions where buyers move quickly on a competitively priced unit without asking questions that would have stopped them — and then lose financing mid-contract on a building that looked perfectly fine from the parking lot.
The regulatory framework that came out of Surfside was designed to protect people who live in buildings. Its financing implications are real, and in 2026 they are arriving in Orange County escrows. Do the building homework before you fall in love with a unit. The documents are available. Most buyers just never ask for them.
