The building failed project review. That doesn't mean the unit is unfinanceable — it means the loan has to come from somewhere other than Fannie or Freddie.
Updated July 28, 2026 · Ray Nadeau NMLS #1027617 · Kelly Nadeau NMLS #1027618
Fannie Mae is retiring Limited Review and Freddie Mac is retiring Streamlined Review. For loan applications dated on or after August 3, 2026, affected established condo projects generally require a Full Review unless they qualify for a waiver — meaning the lender examines the association's budget, reserves, insurance and financial condition, not just the borrower.
A non-warrantable condo is a unit in a project that doesn't meet Fannie Mae or Freddie Mac eligibility rules, so conventional financing isn't available regardless of how strong the borrower is. These units may still be financeable through portfolio, non-QM, DSCR and bank statement programs, which underwrite the borrower and the unit rather than requiring agency project approval.
| Loan type | Needs agency project approval? | Typically used for | Trade-off |
|---|---|---|---|
| Conventional (Fannie/Freddie) | Yes — project must not be "Unavailable" in CPM | Warrantable projects only | Lowest cost, but the building can disqualify you |
| Portfolio | No — lender retains the loan | Primary residence or second home in a failed project | Lender-specific overlays; terms vary widely |
| Non-QM | No | Borrowers who qualify when the project doesn't | Prices above conventional; more documentation flexibility |
| DSCR | No | Investment units qualified on rental income | Investor-only; personal income not used |
| Bank statement | No | Self-employed buyers in any project type | Requires consistent deposit history |
| Cash | Not applicable | Distressed or heavily assessed buildings | Smallest buyer pool — which is why prices fall |
All programs are subject to credit approval, program availability, and property and project eligibility. Terms and availability vary by borrower. Not a commitment to lend.
Almost none of these have anything to do with the buyer. That's the part borrowers find hardest to accept — the file dies over a building's paperwork.
Fannie Mae maintains an internal report of ineligible projects. Loans secured by units in projects carrying an "Unavailable" status in Condo Project Manager are ineligible for purchase by Fannie Mae. The report is distributed to lenders and is not published for owners or associations, which is why most owners have no idea their building is on it until a buyer's loan collapses.
Florida carries a disproportionate share. Data obtained by the law firm Allcock Marcus and reported in spring 2025 put Florida at 1,438 ineligible buildings, with 696 of those — nearly half — concentrated in Miami-Dade, Broward and Palm Beach counties. Those figures are the most specific publicly reported numbers available; because the database is confidential and updated continuously, treat them as a point-in-time snapshot rather than a current count.
Fannie Mae currently requires reserves of at least 10% of the association's annual budgeted income. Under Lender Letter LL-2026-03 that threshold rises to 15% for loan applications dated on or after January 4, 2027 — so an association that clears the bar today may not clear it in eighteen months. A well-qualified borrower can still lose conventional financing because the association has low reserves, unresolved repairs, a deductible problem, or documents that are out of date.
Evidence of critical repairs, structural deterioration findings, or an active evacuation order will stop an agency loan. In Florida this frequently traces back to a milestone inspection that identified problems the association hasn't finished addressing.
Construction defect suits and structural claims are treated differently than routine matters, but either way litigation is one of the fastest paths to a failed project review.
Fannie Mae treats a project as ineligible when 15% or more of units are 60 or more days delinquent on assessments, or when a single entity owns more than 20% of the units in a project of 21 or more units.
Worth knowing, because most published guidance is now out of date on this: the separate 50% investor-concentration cap was retired by LL-2026-03 effective March 18, 2026. A high share of tenant-occupied units is no longer, by itself, a Fannie Mae disqualifier. The single-entity rule is a different test and still applies.
The master policy must carry replacement-cost coverage, and effective July 1, 2026 the per-unit deductible is capped at $50,000. Deductible structure and coverage limits are underwriting items, not formalities — a master policy outside agency standards affects every unit in the building.
Important: a project can move on and off eligibility status. A building that failed review last year isn't permanently disqualified, and a building that passed last year isn't guaranteed to pass today. Status should be checked at the time of application, not assumed.
If the denial points to project eligibility rather than credit, income or assets, the borrower was never the issue. A non-agency program may still work on the same unit at the same price, subject to approval.
Three buyers in a row falling out at day 15 is a project review problem, not a pricing problem. Knowing the building's status before listing lets you market to buyers who can actually close. Related reading: 7 reasons your Florida condo isn't selling.
Units in non-warrantable buildings often trade at a discount because the financeable buyer pool is small. See DSCR loans in Florida for rental-income qualifying, or Florida investor loans for the broader picture.
Not every answer is a sale. Depending on equity and the numbers, a cash-out refinance may be worth exploring — though project status affects refinance eligibility too. See cash-out refinance in Florida.
If the project fails review and your income is hard to document conventionally, both problems get solved by the same category of program. See bank statement loans or self-employed mortgage pathways.
No. It's a financing classification, not a safety rating. Well-maintained buildings become non-warrantable over paperwork, litigation or investor ratios that have nothing to do with the physical structure.
Yes. Status can change when the underlying issue is resolved and documentation is updated. It isn't permanent.
Often, yes. Non-agency programs frequently require more equity than conventional financing. Requirements vary by lender and program and are determined at underwriting.
Generally these programs price above conventional financing because the lender retains more risk. Actual pricing depends on the borrower, the property, the program and market conditions. We don't quote pricing on a web page — we quote it on a file.
HECM financing has its own condo project requirements, separate from Fannie and Freddie rules. See how a reverse mortgage works in Florida.
Boards often don't know. The ineligibility report goes to lenders, not associations, so a board can be operating in good faith and still be unaware. Verify through a lender.
We'll check the project's current status and explain what financing options exist for that specific building — before you list it, before you make an offer, and before another contract falls apart at underwriting.
Kelly Nadeau NMLS #1027618 · Ray Nadeau NMLS #1027617