If you listen to some of the headlines, you would think the new Fannie Mae and Freddie Mac rules are going to kill the condo market. The actual sales numbers are telling us something very different. In June 2026, existing condo sales increased 11.96% in Miami-Dade, 15.53% in Broward and 18.64% in Palm Beach County compared with a year ago. Miami-Dade condo sales have now increased year over year in eight of the last 10 months. That doesn't look like the end of the condo market to me. It looks like a market adjusting and beginning to move forward again.
The latest Fannie Mae and Freddie Mac changes are certainly going to require us to understand condo financing better. Beginning August 3, the streamlined or “limited review” process was eliminated for most established condominium projects, meaning lenders will take a deeper look at the association's finances, insurance, reserves and physical condition. The current reserve allocation standard is generally 10%, and beginning January 4, 2027, Fannie Mae is increasing that benchmark to 15%, although associations can also qualify through an acceptable reserve study and appropriate funding.
I don't see that as the death of condos. I see it as something that can ultimately make the condo market stronger.Buyers deserve to know that the building they are purchasing into has money available for roofs, elevators, concrete restoration and other major repairs. A condo with properly funded reserves and fewer surprises should eventually become easier to understand, easier to finance and more attractive to buyers. We are moving toward a market where the financial health of the building becomes almost as important as the condition of the unit.
And over the long term, I believe this can actually help affordability. One of the biggest problems with an underfunded association isn't simply the monthly maintenance payment. It is the surprise $20,000, $40,000 or $70,000 assessment that an owner never planned for. Associations with declining reserves have been found to be more than 20% more likely to levy special assessments than associations with stable or growing reserves. Building those expenses into responsible reserve planning creates greater transparency and potentially far more predictable ownership costs.
There is also something being missed in much of the conversation: Fannie Mae and Freddie Mac are not the entire mortgage market. If a condo building cannot satisfy agency project requirements, that does not automatically mean the buyer has to pay cash. Non-QM and portfolio lenders are actively financing non-warrantable condominiums. Angel Oak, Deephaven and A&D Mortgage are examples of lenders offering programs for these properties, and current A&D program materials advertise financing of up to 85% LTV on certain non-warrantable condo transactions, subject of course to borrower and project qualifications.
That is why Realtors need to be very careful about telling a buyer, “You can't finance this condo.” The better answer may be, “You can't finance this condo with this particular conventional loan.” Those are two completely different statements. Non-QM programs can include bank-statement financing, DSCR programs for investors and financing specifically designed for non-warrantable condos. The rate, down payment and underwriting may be different, but there are financing alternatives that can keep a transaction alive when an agency loan doesn't work.
South Florida condos remain one of the most important paths to homeownership in a market where single-family homes have become increasingly expensive. We should not be afraid of stronger buildings, better reserves and greater financial transparency. We should embrace them. There will be some disruption while associations, lenders, Realtors and buyers learn the new rules, but I believe what comes out on the other side will be a healthier condo market, more confident buyers and buildings that are better prepared for the future. The condo market isn't disappearing. It is growing up.
