Buying a condo in Boca Raton and keep hearing “warrantable” and “non‑warrantable”? You are not alone. These terms can shape your interest rate, down payment, and even whether your loan gets approved. In this guide, you will learn what they mean, why many Boca buildings are flagged, and the exact steps to take so you can move forward with confidence. Let’s dive in.
Warrantable vs. non‑warrantable basics
A condo is considered warrantable when it meets the project standards used by Fannie Mae, Freddie Mac, and some government programs. That usually opens the door to conventional, often lower‑rate financing. If a project is non‑warrantable, many lenders limit options or require specialty loans with bigger down payments and higher rates. Fannie Mae’s project standards set the tone for most lenders.
What lenders check
Lenders review the building’s paperwork, not just your financials. Common checkpoints include:
- Single‑entity ownership limits in the building. Many projects with 21 or more units flag if one entity owns over 20% of units. See Fannie Mae’s ineligible project traits.
- Delinquent HOA dues. Typically no more than 15% of units can be 60 or more days past due. Review Fannie’s full review process.
- Commercial space. Many guidelines allow 35% or less of total square footage as commercial use. See project standards.
- Adequate reserves and a current reserve study, plus clear insurance with acceptable deductibles. Fannie and Freddie generally cap master policy deductibles at 5% of the master limit, and lenders often require proper HO‑6 coverage for owners. See master insurance requirements.
- Litigation status, turnover from developer control, and whether the project is fully complete.
FHA and VA paths
- FHA: You can finance units in FHA‑approved projects, and FHA also allows a Single‑Unit Approval process for an otherwise unapproved project. It is document‑heavy and has its own checks for reserves, insurance, and occupancy. Learn more about FHA condo approvals and Single‑Unit Approval.
- VA: VA loans require the building to be VA‑approved or to go through approval. Check VA’s program overview for condo eligibility.
Why many Boca condos are flagged
Florida’s post‑Surfside laws require milestone structural inspections and better reserve planning for buildings that are three or more stories. These rules, starting with SB 4‑D in 2022 and updates in 2023, put safety and reserves under the microscope, which lenders take very seriously. Read the statewide framework in SB 4‑D.
Palm Beach County enforces these milestone inspection requirements and tracks compliance. If a building lacks completed reports, has a pending Phase‑Two inspection for structural issues, or cannot show a remediation plan and funding, standard agency financing often stalls. See the county’s guidance on mandatory milestone inspections.
At the same time, associations are updating reserve studies, adjusting budgets, and addressing insurance costs. Large assessments, inadequate reserves, or insurance structures with high deductibles can push a project into non‑warrantable territory. Lenders will request reserve studies, budgets, and insurance declarations, and they will scrutinize deductibles against agency rules.
How warrantability impacts your loan
If a condo project meets agency standards, conventional conforming financing is usually available and pricing is often more favorable. If the project does not meet standards, many lenders decline the loan or require exceptions, and others pivot to specialty products.
Common red flags that block conventional loans include single‑entity ownership above program limits, delinquent HOA dues over guideline caps, pending structural or safety litigation, excessive commercial space, missing or inadequate reserves, and master insurance deductibles over acceptable levels. See Fannie’s ineligible project list and insurance requirements.
Financing paths if a condo is non‑warrantable
- Portfolio loans. Some banks or credit unions keep these loans on their own books and set custom terms.
- Non‑QM and specialty programs. Lenders may offer options such as bank‑statement loans or investor‑focused products. Expect larger down payments and higher rates. Industry guidance shows down payments commonly 20 to 30% or more for these loans. See an example overview of non‑warrantable condo loans.
- FHA Single‑Unit Approval. If your unit qualifies, FHA can sometimes work in an otherwise unapproved project. Learn about FHA’s condo process.
- VA. If the project is VA‑approved or can become approved, a VA loan may be possible. Review VA condo eligibility.
Buyer checklist for Boca Raton condos
Request these items early, ideally before you finalize your contract:
- A completed condo questionnaire from the HOA, or for FHA buyers, the HUD‑9991 form used in Single‑Unit Approval. See HUD forms.
- The current budget, year‑to‑date financials, the latest reserve study, and proof of reserve funding.
- The master insurance declaration page, including coverage limits and deductibles, plus owner HO‑6 requirements.
- Litigation disclosures and recent HOA meeting minutes noting any claims or judgments.
- A count of units that are investor‑owned, a list of units more than 60 days delinquent, and confirmation of developer turnover.
- Building completion documents and status of any milestone or Phase‑Two inspections.
Seller and HOA tips to improve financing
- Update the reserve study and show a clear plan to fund reserves. If using a line of credit or staged funding, document it.
- Complete required milestone inspections, document remediation plans, and communicate timelines to buyers and lenders. See county guidance on milestone inspections.
- Align master insurance with agency expectations, including replacement cost and deductibles. Review insurance requirements.
- If seeking FHA or agency project approvals, keep application records organized and share status updates with interested buyers and their lenders.
Protect your contract
If you discover a non‑warrantable issue during the process, consider negotiating:
- A longer financing or inspection period to allow documentation and approvals.
- Seller credits or escrows related to known assessments or repairs.
- A requirement that the HOA completes the lender’s questionnaire with acceptable responses before closing.
The bottom line
Warrantability comes down to the building’s paperwork, reserves, insurance, inspections, and litigation status. In Boca Raton, new safety and reserve rules make these items front and center. If you find a non‑warrantable condo, you still have options, but you should expect tighter terms and larger down payments.
Thinking about a Boca Raton condo and want a plan that fits your goals and timeline? Connect with Richard Lemon for local guidance, a lender game plan, and a smooth path from offer to closing.
FAQs
What does “warrantable” mean in condo financing?
- It means the building meets agency standards so lenders can sell the loan to Fannie Mae or Freddie Mac, which typically allows conventional, often lower‑rate financing. See Fannie Mae project standards.
Why are some Boca Raton condos non‑warrantable now?
- Florida’s milestone inspection laws and county enforcement require buildings to document structural safety and reserves. Missing reports, Phase‑Two issues, large assessments, or insurance problems often limit conventional loans. See SB 4‑D and Palm Beach County guidance.
How can I finance a non‑warrantable condo?
- Options include portfolio or non‑QM loans that often require 20 to 30% down, FHA Single‑Unit Approval where eligible, and VA if the project is VA‑approved. See FHA’s condo guidance and an example of non‑warrantable options.
What single document do lenders always request from the HOA?
- The condo questionnaire, and for FHA Single‑Unit Approval, the HUD‑9991. See HUD forms.
Do milestone inspections automatically kill financing?
- No. But failed reports, Phase‑Two findings without a remediation and funding plan, or missing documentation often block standard agency loans until resolved. See the county’s milestone inspection page.
