A buyer with strong credit and a clean pre-approval can still lose a Tequesta condo in underwriting. The reason is the building's paperwork. For conventional loan applications dated on or after August 3, 2026, Fannie Mae no longer accepts its Limited Review process for established condo projects. Those projects now have to go through Full Review or, where it applies, a Waiver of Project Review. Freddie Mac made the matching change and dropped its Streamlined Review for applications received on or after the same date.
In practice, the lender now looks closely at the association as well as the borrower. That means its budget, its reserves, its inspection reports and its repair history. If the building's record doesn't hold up, the buyer's financing doesn't either.
The Shortcut That Ended in August
Fannie Mae announced the change in Lender Letter LL-2026-03 on March 18, 2026. The letter also says retiring Limited Review "effectively retires the remaining geographic restrictions that apply to the state of Florida." Florida condo buyers had been handled under separate restrictions, and those are gone. The price of that is a more detailed building review on most financed purchases.
The same letter tightened how reserve studies can be used. A lender that leans on a reserve study to show a project is adequately funded must confirm the association's budget includes the highest recommended reserve allocation in that study. Lenders can no longer use the baseline funding method, which allowed a reserve balance to approach zero without falling below it.
There is one exception that matters here. Fannie expanded its Waiver of Project Review to new and established projects with ten or fewer units. Projects of five to ten units qualify only if they are not part of a master association or a larger development. Small buildings and larger buildings now face meaningfully different underwriting.
Three Dates Inside Five Months
The August change is the first of three deadlines that land close together:
- August 3, 2026. Limited Review and Streamlined Review end for new loan applications. Established projects go to Full Review or a waiver.
- December 31, 2026. Florida allows associations whose milestone inspection is due on or before this date to complete the Structural Integrity Reserve Study, or SIRS, at the same time as the inspection. A SIRS done that way must be finished by December 31, 2026. For other owner-controlled associations that existed by July 1, 2022, the general SIRS deadline was December 31, 2025.
- January 4, 2027. Under Full Review, Fannie's minimum reserve allocation rises from 10% to 15% of the association's annual budgeted assessment income, for loan applications dated on or after this date.
Taken together, a building finishing its SIRS in December could get a new funding schedule just days before lenders start checking a higher reserve line. Florida's Department of Business and Professional Regulation says that if a SIRS shows reserves can't cover anticipated structural costs, the association may need to levy assessments or take out a loan or line of credit to meet the schedule. If a buyer's contract is written in November and the loan application is dated after January 4, the building gets measured against the stricter number.
What Full Review Actually Pulls
Fannie Mae's Selling Guide spells out what lenders weigh. Below is the evidence an underwriter may ask for and why each item matters to a Tequesta buyer.
| Document | What the lender is checking |
|---|---|
| Condo questionnaire | Fannie's Form 1076 is optional. If a questionnaire leaves eligibility questions unanswered or marked unknown, the lender must get enough other information to decide, or the loan can't be sold to Fannie Mae. |
| Structural or mechanical inspection reports | The lender must review any such report completed within three years of the project review. Without a recent one, it uses other evidence to look for critical repairs. |
| HOA minutes, financial statements, engineers' reports | Fannie lists these as possible evidence, and the lender decides what it needs. |
| Annual budget | Under Full Review, the replacement reserve line is held to 10% now and 15% for applications dated on or after January 4, 2027. |
| Condo Project Manager status | A project marked "Unavailable" can't be purchased under any review type. |
A failed mandatory local inspection, or required repairs or recertification that are still unfinished, can make a project ineligible. Fannie says critical repairs must be completed before the project becomes eligible.
Why a Special Assessment Doesn't Clear the Way
Many owners assume that once the association votes a special assessment to pay for repairs, the issue is settled for buyers. Lenders don't see it that way. Fannie's guidance says an imposed special assessment doesn't replace the reserve allocation required under Full Review. A special assessment tied to safety or structural work doesn't restore eligibility until the repairs are complete.
That puts the window between an assessment vote and the end of construction at the center of things. During that time, the building can be fully funded for the work and still be ineligible for a conventional loan.
Florida law adds another layer. Associations with budgets adopted on or after January 1, 2025, can no longer vote to waive or underfund SIRS reserves, according to the Department of Business and Professional Regulation. HB 913, which took effect July 1, 2025, kept that limit and added one exception. After a milestone inspection, a narrow exception lets a majority of members pause or reduce SIRS reserve contributions for up to two consecutive annual budgets to fund recommended repairs. A new SIRS is then required before contributions resume. The state pause and the lender's reserve test are separate rules. A pause that is lawful under Florida law doesn't automatically satisfy a lender reviewing the budget.
How the Village Handles Milestone Inspections
Florida's milestone framework covers condominium and cooperative buildings with at least three habitable stories. Inspections are generally due at 30 years and every 10 years after that, and local officials may require the first one at 25 years in qualifying circumstances. If Phase One identifies substantial structural deterioration, a Phase Two inspection is required. Repairs identified in Phase Two must begin within 365 days unless a local deadline is earlier.
Tequesta has its own local framework for this. At its November 9, 2023 meeting, the Village Council held the first reading of Ordinance 13-23, which proposed local implementation of Florida Statute 553.899. It covers report contents, posting and publication, notice, repair timelines and enforcement. The Building Department keeps a Milestone Inspection page on the Village website.
The building at 200 Waterway Road shows why local enforcement matters. In April 2022, CBS12 reported the building was evacuated after an engineer found significant deterioration and cracking in its columns. In December 2024, Tequesta officials told the CBS12 I-Team that repairs had been made and the building was cleared for occupancy again. That's the public record through 2024. A building's current eligibility is a question for its documents and the lender, not for news coverage.
Where It Shows Up in the County Numbers
Palm Beach County's August 2026 figures from MIAMI REALTORS®, released September 16, 2026, show condos behaving differently from single-family homes. Active condo listings fell 17.09% year over year to 5,770, the seventh straight monthly decline. Even so, condos still had 6.7 months of supply in August 2026, compared with 3.5 months for single-family homes. The report calls 6.7 months a balanced market, while 3.5 months points to a seller's market.
Pricing follows the same split. The countywide condo median was $300,000 in August 2026, up 5.26% from $285,000 a year earlier. Sellers received a median 93% of original list price on existing condos that month, compared with 95% on single-family homes. Condos took a median 69 days from listing to contract, compared with 74 days in August 2025, and 108 days from listing to closing.
Financing explains part of that gap. The same release notes that only 21 of the 2,397 condo buildings in Miami-Dade, Broward and Palm Beach counties are approved for FHA loans. Freddie Mac's 30-year fixed rate averaged 6.67% in August 2026 and reached 7.17% as of September 15, 2026. Fewer listings, a balanced-market supply level and a wider discount from list price all fit a buyer pool that shrinks at the building level. These are countywide figures, though, and they can't isolate the cause or describe Tequesta alone. The next statewide release is scheduled for October 16, 2026.
The Order of Operations
For a buyer, building documents come before the offer:
- Ask for the most recent milestone inspection report and SIRS, and the date each was completed.
- Get the current budget and check the replacement reserve line against both the 10% and 15% thresholds.
- Read the board minutes for the past year for repair discussions, engineer findings or special assessment votes.
- Ask your lender whether the project has a status in Condo Project Manager before your appraisal is ordered.
- Count the units. A project of ten or fewer units may qualify for a waiver.
For a seller, the same file affects pricing. A listing that comes with a complete questionnaire, current reports and a budget that meets the reserve test gives financed buyers something to work with. If any of those pieces are missing, the realistic buyer pool may lean toward cash.
FAQ
Does my building need a milestone inspection?
Under state law, the requirement applies to condominium and cooperative buildings with at least three habitable stories, generally starting at 30 years. The Village's Building Department handles local administration.
What if a building is marked "Unavailable"?
Fannie Mae says a lender can ask for a reassessment with evidence that the eligibility issues have been resolved.
Do these lender rules affect cash purchases?
Fannie Mae and Freddie Mac project reviews apply to loans sold to those agencies. State inspection and reserve requirements apply to the building no matter how a unit is bought. For questions about your own loan or legal position, check with your lender and an attorney.
If you own or are considering a condo in Tequesta and want to know how your building's inspection, reserve and repair file looks to a lender before you list or write an offer, Jill McCarthy Thogersen can walk through those documents with you in a market consultation, or prepare a free home valuation based on how buyers are actually financing purchases in your building this fall.
