The thresholds, as of September 2026
These are Fannie Mae's rules; Freddie Mac's are parallel in most places and were changed on the same day in March 2026.
| Issue | What fails the review |
|---|---|
| Single-entity ownership | One person or company owning more than 2 units in a project of 5–20 units, or more than 20% of the units in a project of 21 or more |
| Commercial space | More than 35% of the project's total floor area used for nonresidential purposes |
| Dues delinquency | More than 15% of units 60 or more days behind on regular or special assessments |
| Reserves | Less than 10% of the annual budget going to replacement reserves (without an acceptable reserve study); the minimum becomes 15% for applications dated on or after January 4, 2027 |
| Litigation | Any suit involving the association except a short list of minor matters — insured claims, non-monetary disputes, small claims relative to reserves, collection actions |
| Hotel-like operation | Hotel or resort licensing, mandatory rental pools, front-desk registration, restrictions on owner use, rental profits shared with the association or manager, "hotel" or "resort" in the name |
| Critical repairs | Deficiencies affecting safety, soundness or habitability, a failed mandatory structural inspection, or unfunded repairs over $10,000 per unit due within 12 months |
| Special assessments | An assessment funding critical repairs that are not yet complete |
| New or incomplete projects | Fewer than 50% of units sold or under contract to principal-residence or second-home buyers, or the building or phase not substantially complete |
| Association business income | More than 10% of budgeted income from non-incidental businesses such as a restaurant or spa (15% allowed for association-owned amenities) |
| Always ineligible | Timeshares and fractional ownership, houseboat projects, multi-dwelling unit ownership, continuing-care communities, mandatory recreational memberships |
What is no longer on the list
Investor concentration. For years, a building where most units were rented out could not support an investment-property loan through the agencies. Fannie Mae and Freddie Mac retired that owner-occupancy test for established projects on March 18, 2026. A building full of tenants can now be warrantable on that point alone; new projects still need the presale test above. Many older articles online have not caught up — the 2026 changes page has the details.
How the review is actually done
The lender reviews the project using the association's questionnaire, the budget, the insurance certificates and, where it applies, a structural or reserve study. Since August 3, 2026 the agencies' abbreviated review is gone, so most attached projects now get the full review — more documents, and more chances for one of the traits above to surface. Fannie Mae also marks some projects in its Condo Project Manager system as "unavailable," which ends the conversation for any conventional lender; that list is explained on its own page.
Why the same building can pass one lender and fail another
Two reasons. First, lenders layer their own requirements on top of the agencies' — a lender may simply decline condotels or buildings above a certain age. Second, the review is a snapshot: a delinquency rate or a lawsuit that existed in March may be gone by June. A decline from one lender is information, not a verdict.
How these show up in Florida
- Critical repairs and assessments are the signature Florida problem, driven by milestone inspections of older mid- and high-rise buildings — see the Florida law page.
- Insurance — coverage and deductibles in a hurricane market — is the most-cited reason Florida buildings fail review.
- Hotel-like operation is the usual issue in resort markets such as Orlando and the Panhandle.
- Litigation often means an association's dispute with its insurer after a storm.
What to do with this list
Find out which trait your building has, then find a lender whose guidelines accept it. The second step is the one a broker is for.
Sources, checked September 2026: Fannie Mae Selling Guide B4-2.1-03, Ineligible Projects · Fannie Mae Selling Guide B4-2.2-01, Full Review Process · Fannie Mae Selling Guide B4-2.2-02, new and newly converted projects · Fannie Mae Lender Letter LL-2026-03 (March 18, 2026) · Freddie Mac condominium unit mortgage FAQ. Agency guides change; a lender confirms the rules in force on your application date.
Common questions
Does a high number of rentals make a condo non-warrantable?
Not anymore for established projects. Fannie Mae and Freddie Mac retired the investor-concentration test on March 18, 2026. New projects still have to meet a presale test.
Does one bad trait make the whole building non-warrantable?
Yes. Any single ineligible characteristic is enough for the agencies to decline the project.
Is a condotel always non-warrantable?
For Fannie Mae and Freddie Mac, a project that operates like a hotel is ineligible. Many portfolio and non-QM lenders finance them.
Who decides whether my building is warrantable?
The lender, by reviewing the association's documents against agency rules — or Fannie Mae directly, when it flags a project as unavailable.