Selling a Non-Warrantable Condo in Florida: What Boca Raton and Delray Beach Owners Can Do When Lenders Say No

What makes an older Florida condo building non-warrantable in 2026?

An older Florida condo building becomes non-warrantable when it meets any one of Fannie Mae’s ineligible-project characteristics or fails a Full Review requirement; the most common triggers in coastal Palm Beach County are critical repairs, structural special assessments, litigation and thin reserves. One failed item is enough, even if every other line in the review is clean.

Critical repairs, in Fannie Mae’s definition, are material deficiencies that, if left uncorrected, have the potential to result in or contribute to critical element or system failure within one year (Fannie Mae Selling Guide B4-2.1-03, guide date August 5, 2026). The guide lists examples such as mold, water intrusion, advanced deterioration, failed mandatory inspections, and unfunded repairs costing more than $10,000 per unit that should be undertaken within the next 12 months. Damage isolated to individual units that does not affect the project’s overall safety or soundness, and routine preventive maintenance in the operating budget, are treated differently.

The table below lists the triggers a seller is most likely to meet, the rule behind each one and where the seller can check it before a buyer’s lender does.

Freddie Mac applies a parallel set of project standards, and on March 18, 2026 it issued Guide Bulletin 2026-C, which retires its Streamlined Review and expands its Exempt From Review option to projects of 2 to 10 units, in line with the Fannie Mae changes described in section 4. A building that fails one agency usually fails the other, because the triggers overlap.

How Florida’s inspection laws feed the lender’s review

A milestone inspection is a structural inspection of a condominium or cooperative building three habitable stories or higher, required by s. 553.899, Florida Statutes, when the building reaches 30 years of age and every 10 years after that. Phase one is a visual examination; phase two, with possible destructive testing, follows when phase one finds substantial structural deterioration. A structural integrity reserve study (SIRS) is a study of the roof, structure, fireproofing and fire protection, plumbing, electrical, waterproofing and exterior painting, windows and exterior doors, and certain other items, required at least every 10 years by s. 718.112(2)(g).

Neither report decides warrantability on its own. A lender reads them for evidence of the conditions in the table: a phase two finding the association has not yet repaired, a reserve schedule the budget does not fund, or a special assessment adopted to pay for the work. The full milestone and SIRS process for sellers is covered in the series guide on selling a condo after the milestone inspection in Florida; this guide focuses on what those reports do to your buyer’s financing.

What does not make a condo non‑warrantable

Age alone does not. Fannie Mae’s rules do not set a maximum building age, and a 1970s building with completed repairs, a funded budget and no litigation can be fully eligible. A unit-level issue, such as dated finishes or an old water heater, is a matter for the buyer’s home inspection, not the project review. And an approved special assessment for non-structural work, such as repaving or lobby renovation, is reviewed by the lender but is not in itself listed as an ineligible characteristic.

What changed for Florida condo financing in 2026, and what changes in January 2027?

Fannie Mae Lender Letter LL-2026-03, issued March 18, 2026, ended Limited Review for condo projects with more than 10 units for loan applications dated on or after August 3, 2026, and raises the minimum reserve allocation from 10% to 15% of the association budget for applications dated on or after January 4, 2027. Freddie Mac announced matching changes the same day in Guide Bulletin 2026‑C.

The end of Limited Review

Limited Review was a streamlined project review that let lenders skip most association documents for attached units in established projects when the buyer made a larger down payment. Under the Selling Guide in force in 2025, Florida attached units already faced tighter loan-to-value limits under Limited Review than units elsewhere. For applications dated on or after August 3, 2026, those shortcuts are gone for projects over 10 units, according to legal and industry summaries of LL-2026-03; every conventional loan in those buildings now goes through a Full Review unless another waiver applies. The same lender letter expanded the waiver of project review to new and established projects of up to 10 units, and Fannie Mae’s Selling Guide now waives project review for two- to four-unit projects and for five- to ten-unit projects that are not part of a larger development or master association (B4-2.1-02, guide date August 5, 2026).

For a seller, the effect is that a conventional buyer’s lender will now read the budget, the reserve figures, the questionnaire and the insurance in almost every Boca Raton or Delray Beach building of any size. A building that passed quietly for years under Limited Review may now meet its first full look. A small building of 10 units or fewer moves the other way, and the series guide to owning in a small South Palm Beach condo building explains why buyers look at small associations differently.

Reserves at 15% from January 4, 2027

A reserve study is a professional analysis of a building’s major components, their remaining useful life and the money the association should set aside to replace them. Under the change summarized above, a conventional loan in a project with more than 10 units will need either a budget that allocates at least 15% of assessment income to reserves or a reserve study that meets Fannie Mae’s requirements. The Selling Guide in force in October 2026 already requires such a study to be completed within three years of the date the lender approves the project (B4-2.2-02), and industry summaries of the lender letter describe the 2027 alternative as reserves funded at the study’s highest recommended level. Florida associations adopt their next-year budgets in the fall, so the budget an association approves in late 2026 decides whether its units pass that test for buyers whose applications are dated in January 2027 and later.

Where Florida law and lender rules pull in different directions

Florida law and Fannie Mae now push reserves in the same general direction, with one gap a seller should know. For budgets adopted on or after December 31, 2024, unit-owner-controlled associations may not vote to provide no reserves, or less than required, for the items in the SIRS (s. 718.112(2)(g), Florida Statutes, 2026). The same subsection lets an association, after completing a milestone inspection, temporarily pause reserve contributions for no more than two consecutive annual budgets by majority vote while it funds the required repairs. A pause can be lawful under Florida law and still leave the budget short of a lender’s reserve test. If your board is discussing a pause, ask how it will affect buyer financing before the vote, not after.

Florida deadlines behind the reports buyers now receive

For associations existing on or before July 1, 2022, the first SIRS was due by December 31, 2025, with an extension to December 31, 2026 available when combined with a milestone inspection (s. 718.112(2)(g)). Buildings that reached 30 years before July 1, 2022 needed a milestone inspection before December 31, 2024; those reaching 30 years between July 1, 2022 and December 31, 2024 have until December 31, 2025; later buildings must complete it by December 31 of the year they reach 30 (s. 553.899). Once a phase two report recommends repairs, the association must commence them within 365 days. These dates mean that in October 2026 most older Palm Beach County mid-rise and high-rise buildings have reports a buyer and a lender can read, and many have repair programs under way.

Does a non-warrantable building lower your price or slow the sale?

A non-warrantable building usually lowers the number of buyers who can close, and fewer buyers typically means more negotiation and more time; how much depends on the reason for the status, the assessments buyers inherit and the local supply of condos. Public data does not separate warrantable from non-warrantable sales, so the honest answer is built from the overall market plus the specific building.

The table below compares Palm Beach County condo and townhouse sales with the statewide figures for August 2026. Cash shares are calculated from the “paid in cash” and “closed sales” lines of each release.

Source: Florida Realtors, Palm Beach County Townhouses and Condos Monthly Market Summary (published with Miami Realtors) and Florida Townhouses and Condos Monthly Market Summary, August 2026, data released September 16, 2026.

The belief to test: “A non-warrantable condo has no buyers”

The data does not support it. In August 2026, 57.3% of Palm Beach County condo and townhouse sales closed in cash, up from 55.0% a year earlier, according to the Florida Realtors release. A non-warrantable status removes conventional and VA buyers, but in this county the cash segment alone is larger than every financed segment combined. What the status does change is negotiating leverage: cash buyers know when the financed competition is missing, and they price special assessments and repair risk into their offers.

Reading the other lines

Months supply of inventory is the number of months it would take to sell all active listings at the current pace of sales. At 6.7 months in August 2026, Palm Beach County condo supply was lower than the 9.0 months of August 2025. The list-to-sale price ratio compares the final sale price with the asking price; the figure in the release, the median percent of original list price received, uses the first asking price, so it captures price reductions. A median of 92.6% means the middle Palm Beach County condo sale in August 2026 closed at 92.6% of its first asking price. Days on market, or time to contract, measures how long a listing takes to go under contract; the county median was 69 days.

How a pricing analysis changes for a non-warrantable unit

A comparative market analysis (CMA) is a pricing study that estimates a home’s likely sale price from recent comparable sales, active listings and expired listings. For a non-warrantable unit, the comparables need one more filter: the financing conditions the buyers faced. Sales in your building or in buildings with similar status, assessments and repair stage are better evidence than sales in a nearby warrantable building with the same floor plan. The pricing analysis should also show the special assessment balance a buyer will inherit, because cash buyers subtract it from what they would otherwise pay.

Portfolio and non-QM lenders still order appraisals, so a financed buyer can still raise an appraisal question; the series guide to options when the appraisal comes in low covers that case. The listing commission and any buyer-agent compensation are negotiable and are part of your net, so settle them in writing at the start; the series guide on whether sellers pay the buyer’s agent in Florida explains the options after the 2024 rule changes.

Can the association make the building warrantable again, and should you wait?

Yes, a building can become warrantable again when the association removes the condition that failed the review, for example by completing critical repairs, resolving the lawsuit, curing delinquencies or funding reserves to the required level; whether you should wait depends on how close that fix is, what it will cost you as an owner and how long you can carry the unit.

What each fix involves

• Critical repairs: the work must be finished, not just funded or contracted. Fannie Mae’s Selling Guide says that if the special assessment is associated with a critical repair and the issue is not remediated, the project is ineligible, and that a project with unaddressed critical repairs stays ineligible until the repairs have been completed and documented (B4-2.1-03). Under s. 553.899, repairs recommended in a phase two milestone report must commence within 365 days, but large concrete restoration programs on coastal buildings can run much longer than the start deadline.
• Litigation: the case must end or the lender must conclude it falls outside the safety, soundness, habitability or functional-use categories. Settlement timelines belong to the parties and the court.
• Reserves: the board can adopt a budget that meets the lender’s reserve test or commission a qualifying reserve study. This fix moves on the board’s budget calendar, usually once a year.
• Delinquencies: the association collects or forecloses its liens until fewer than 15% of units are 60 days or more past due.
• Single-entity ownership: the concentrated owner sells units, which no seller controls.

After any fix, a lender still has to review the project again with current documents; status does not update itself, so ask the lender how it will document the change. Ask the manager to tell you when the association has completed the work and when a lender questionnaire reflecting the change can be issued.

Questions that decide whether to wait

Waiting has its own risk: a building that finishes one repair program may adopt the next one, and the January 4, 2027 reserve change described in section 4 may reset the question for associations whose 2027 budgets fall short. A seller who waits should set a date to re-check rather than an open-ended hope.

Selling in the middle of a repair program is also possible. A buyer purchasing during the work pays less, takes on the remaining installments if the contract says so, and owns the unit when the building returns to eligibility. A cash buyer may accept that trade in exchange for the lower price. The decision is a trade between your price today and your costs and uncertainty while you wait.

Boca Raton and Delray Beach: which local records and rules matter?

In Boca Raton and Delray Beach, the records that matter most for a non-warrantable condo sale are the city’s building-safety inspection files, the Palm Beach County Clerk’s court and official records, the Palm Beach County Property Appraiser record and the association’s own governing documents; Boca Raton also runs its own building recertification program on top of the state milestone law.

Boca Raton’s building recertification program

On August 24, 2021, the Boca Raton City Council adopted Ordinance No. 5589, creating Section 19-162 of the city code, the Building Recertification Inspection Program (City of Boca Raton, accessed October 2026). It covers condominium and cooperative buildings three stories or more, or 50 feet or more in height, that are 30 years old or more, or 25 years or more for buildings within 3 miles of a coastline. The city adopted a $500 fee per recertification for the submittal and review of reports through Resolution No. 39-2022, adopted May 10, 2022. Reports are submitted online or by mail to the city at 200 NW 2nd Avenue, Boca Raton, FL 33432. A seller in a covered Boca Raton building should ask the association for its recertification submittals and the city’s response, alongside the state milestone summary.

Delray Beach and other Palm Beach County cities

In Delray Beach, the state milestone inspection requirement in s. 553.899 is handled by the city as the local enforcement agency; ask the city’s building division how reports are submitted and whether any local recertification rule applies. The statute lets a local enforcement agency require milestone inspections at 25 years when environmental conditions, such as proximity to salt water, warrant it, so a seller should check whether the city has adopted that earlier trigger. Buildings in unincorporated Palm Beach County fall under the county’s building division. For market context on the city, see the Delray Beach housing outlook for buyers and sellers.

Public records every seller can pull

• Palm Beach County Clerk and Comptroller: court case search for lawsuits naming the association, and official records for recorded declarations, amendments, recreation leases and association liens.
• Palm Beach County Property Appraiser: year built, unit count, owner names and the parcel record a lender’s appraiser will use.
• Florida Division of Corporations (Sunbiz): the association’s active status, officers and annual reports.
• Florida Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares and Mobile Homes: the state regulator for condominium associations.

Building types and the three-story line

The milestone inspection and SIRS laws apply to buildings three habitable stories or higher. Where an older garden-style condominium in Boca Raton or Delray Beach is one or two stories, those statutes do not require the inspection or the SIRS for it. That does not exempt them from Fannie Mae’s rules: a two-story building with roof failures, water intrusion or a structural assessment can still be non-warrantable, and its buyers still receive the budget and financial statements under s. 718.503. Mid-rise and high-rise buildings of three or more habitable stories, such as those on the Intracoastal Waterway and along State Road A1A, are the ones the statutes cover.

Age-restricted communities and rental rules

Where a condominium is operated as housing for older persons, a lawful housing type under federal and Florida fair housing law, its declaration sets age-occupancy rules and purchaser approval steps that become part of the contract timeline. Older declarations may also restrict leasing in the first years of ownership or limit the number of leases per year, which matters to investor buyers using DSCR loans. Read the rules before you market to investors, and state them in the document file.

City-specific seller information is collected in the Boca Raton seller guide and the Delray Beach seller guide.

Sell now, wait or rent: how should you decide?

Sell now when the fix that would restore financing has no funded, scheduled completion date or when carrying the unit costs more than the price gain you expect from waiting; wait when the association has a contract and a near completion date and you can carry the unit; rent only when the declaration allows leasing on terms that fit your plans.

Putting numbers to the decision

Write down four figures before choosing: the price your pricing analysis supports today with the building non-warrantable, the price it supports if the building were eligible, your monthly carrying cost (dues, insurance, taxes, utilities and any mortgage payment), and the special assessment installments you would pay while waiting. The difference between the two prices is the most you gain by waiting; the carrying cost times the months of waiting, plus assessments you would not otherwise pay, is what waiting costs. The figures come from your documents and a current pricing analysis, not from market averages.

Renting while the building repairs

Renting a unit during a repair program can cover carrying costs, but older declarations often limit leasing, and work on balconies, windows or facades can disturb tenants. Rent also does not change the building’s status. If you rent and later sell, the buyer pool is the same, with a tenant in place to manage. Owners with a Port St. Lucie property weighing the same question can compare the approach in the series guide on whether to sell or rent a Port St. Lucie home.

Taxes on the sale

If the condo was your principal residence for two of the last five years, part or all of the gain may be excludable under Section 121 of the Internal Revenue Code; rental periods, depreciation and second-home use change the calculation. The series guide to capital gains tax when selling a home in Florida explains the rules. For advice on the tax result of selling now or later, consult a CPA.

Owners who live out of state

Condo owners who live elsewhere for part or all of the year can still run the whole process. Gathering the association package, reading minutes and screening lenders can all be done remotely, and closing can be signed by mail or online where the title company offers it. The series guide to selling a Florida home from out of state covers access, keys, vendors and signatures. Owners selling a Palm Beach County condo to buy on the Treasure Coast can run the full comparison in the guide to moving from Palm Beach County to Port St. Lucie, and the Port St. Lucie seller page explains how a Treasure Coast listing is prepared.

For sellers in Boca Raton, Delray Beach and the rest of Palm Beach County, Jeannie Jacobson, REALTOR® with RE/MAX Gold, prepares the sell-now and wait scenarios side by side in the written pricing analysis, so the decision rests on the building’s documents and the owner’s own costs. More planning material is collected on the seller resources page and in the overview of home seller representation across Palm Beach County and the Treasure Coast.