Condo Financing Reality In South Palm Beach

Is financing a condo in South Palm Beach tougher than it used to be? You are not imagining it. Recent Florida laws, tighter lender reviews, and higher insurance costs have changed how buyers qualify and how sellers prepare. In this guide, you will learn what lenders look for, how local rules affect approvals, and practical steps to keep your deal on track. Let’s dive in.

Florida rules that affect loans

Florida’s post‑Surfside reforms created mandatory structural “milestone” inspections and stronger reserve requirements for condo buildings three stories or higher. Get familiar with the framework in the state’s summary of Senate Bill 4‑D and later updates.

In Palm Beach County, qualifying buildings near the coast face milestone inspections at 25 years after initial occupancy, then every 10 years. The county enforces reporting and deadlines for buildings three stories or taller. Review local guidance on the Palm Beach County milestone inspections page.

Local authorities have been following up on noncompliance, and news reports confirm increased enforcement activity. See the context in the Palm Beach Post’s coverage of local inspections and penalties.

How rules show up in underwriting

Lenders must confirm that a condo project meets agency standards. For conventional loans, they review project documents through tools like Fannie Mae’s Condo Project Manager and Freddie Mac’s Condo Project Advisor. Fannie’s project review highlights include the 15% cap on units 60+ days delinquent on assessments and exclusions for critical repairs and certain litigation. You can see the thresholds in Fannie’s Selling Guide project review section and Freddie’s Condo Project Advisor FAQ.

Why it matters: milestone reports, reserve studies, and any required repairs are now central to eligibility. If a Phase 1 inspection triggers a Phase 2 and identifies critical repairs, lenders often consider the project ineligible until repairs are addressed or a waiver is granted.

Insurance and HOA costs lenders verify

Coastal buildings must show adequate master insurance and, when applicable, flood coverage. Lenders will check the master policy, flood requirements, and deductibles. You can review agency expectations in Fannie Mae’s flood insurance requirements.

Statewide, insurance premiums have risen and reserve funding rules have increased many associations’ monthly dues or led to special assessments. Lawmakers provided some flexibility in 2024–2025, like allowing loans or lines of credit to fund reserves, but inspections still apply. See the Associated Press overview of recent legislative adjustments.

South Palm Beach building patterns

South Palm Beach features many waterfront mid‑ and low‑rise condos, with a large share from the 1960s and 1970s plus a mix of later buildings. Older buildings are more likely to be at or past their first milestone deadlines, which means buyers should expect recent inspection reports, reserve studies, and possible repair plans as part of underwriting.

Buyer checklist to protect your approval

• Request association documents early: current budget, latest reserve study, 12–24 months of board minutes, bylaws, master and flood insurance certificates, any pending litigation disclosure, and all milestone or structural reports. Palm Beach County’s milestone page explains what is required locally.
• Ask whether the project has had an agency review and if it appears on any ineligible lists. Confirm the percent of units delinquent on dues, any adopted or planned special assessments, and whether a Phase 2 inspection was required.
• Verify insurability. Confirm master policy limits, wind and flood coverage, and deductibles. Get a realistic quote for your unit’s policy so your lender can calculate accurate monthly costs.

Seller steps to keep deals financeable

• Organize documentation buyers and lenders need: updated budgets, reserve studies, proof of funded reserves, low delinquency stats, and clear records of any repairs tied to milestone findings.
• If the association plans major repairs, provide timelines and the funding approach, whether a loan, line of credit, or special assessment. Recent changes gave boards more flexibility in funding, but transparency still matters. The AP’s legislative recap provides context.
• Proactive disclosure reduces last‑minute surprises. Clear, early communication about inspections and assessments keeps qualified buyers engaged.

When the project is not agency‑eligible

Fannie and Freddie routes

Ask your lender whether a different project review path or a waiver is possible. Freddie’s Project Certified and related processes can bring a building back into the eligible pool after issues are resolved. Learn how status works in Freddie’s Condo Project Advisor FAQ and review Fannie’s project standards.

FHA options

FHA supports single‑unit approvals when a building is not on the approved list, subject to strict criteria. Check the rules and the approved list on HUD’s condominium guidance page.

Portfolio and non‑QM loans

Some local or private lenders offer portfolio or non‑QM loans that do not require agency project approval. These usually come with higher rates or stricter cash requirements. Market coverage shows increased reliance on non‑QM loans in some Florida condo deals. See this overview from Mortgage Professional America on how buyers are filling the gap.

Timeline and coordination tips

• In week one, collect association documents and insurance certificates and share them with your lender.
• By inspection and loan application, confirm whether any Phase 2 repairs are pending and how they are being funded.
• Before appraisal, ask your lender to flag any project‑level concerns so you can address them with the association.
• Seven to ten days before closing, re‑verify HOA dues, special assessment schedules, and insurance premiums. Lenders use these numbers in your final approval.

Your advantage in South Palm Beach

Condo financing is doable when you lead with the right documents and a clear plan. If you want a finance‑savvy partner who understands lender standards and coastal building realities, connect with Diana Edwards for tailored guidance on your South Palm Beach purchase or sale.

FAQs

What changed in Florida condo rules after Surfside?

• Florida created milestone inspections and stronger reserve requirements for buildings three stories or higher, which affect financing and disclosures. See the state’s summary of SB 4‑D and updates.

How do Palm Beach County milestones affect buyers?

• The county enforces inspections and reporting for qualifying buildings, and lenders will ask for those reports during underwriting. Review the county milestone page.

Why did my conventional loan get declined for a specific building?

• Common reasons include high delinquencies, critical repairs flagged by inspections, or certain litigation and ownership concentrations. See Fannie’s project review standards.

Can I get FHA financing if the building is not approved?

• Possibly. FHA allows single‑unit approvals in some cases, but the project and unit must meet strict criteria. Check HUD’s condo guidance.

Do milestone inspections always mean a special assessment?

• No. Inspections identify issues. If a Phase 2 finds required repairs, the association will fund them through reserves, loans, or assessments. See context from Building Mavens.

What insurance items can delay a condo loan?

• Gaps in the master policy, missing flood coverage, or very high deductibles can stall approvals. Lenders follow requirements like Fannie’s flood insurance standards.