A buyer who wants a conventional mortgage on a Delray Beach condo now brings more than an appraisal. Since August 3, 2026, their lender has to review the condo association itself, usually through a full project review. That review looks at the association's budget, its reserves, its special assessments and its structural reports. If the association doesn't pass, a buyer with a conventional loan can't close on that unit, however well it shows. For a seller, the people who can actually buy are now set partly by paperwork the seller doesn't control.
What changed on August 3
Fannie Mae announced the change on March 18, 2026, in Lender Letter LL-2026-03. The letter stated, "We are retiring the Limited Review process." Freddie Mac issued a matching notice the same day, Bulletin 2026-C. Under it, established projects with applications received on or after August 3, 2026 have to go through Freddie's established-project review or another approved path.
Limited Review was the shortcut. For many established buildings, a lender could approve a loan without a close look at the association's finances. With that option gone, nearly every conventional condo loan goes through full review. Projects with 10 or fewer units may qualify for a waiver, subject to eligibility rules. The rule is national, not just for Florida. Fannie's letter says the change also retires its remaining Florida-specific geographic restrictions.
The tests a lender now runs on the association
Fannie Mae's Full Review page lists what the lender has to confirm before a project is eligible. In plain terms:
- Budgeted reserves of at least 10%. The lender divides the association's yearly replacement-reserve allocation by its yearly budgeted assessment income, and the result has to reach 10%. A reserve study can stand in for that test only if the budget funds the study's highest recommended amount. "Baseline" funding, which lets the reserve cash balance approach zero, can't be used to get around the 10% minimum.
- Delinquency limits, counted two ways. No more than 15% of units can be 60 or more days behind on regular fees. Separately, no more than 15% can be that far behind on each special assessment.
- Structural reports from the past three years. If one exists, the lender has to get it and review it.
- Details on every special assessment. For each current or planned assessment, the lender has to establish its purpose, whether it was approved, the original and remaining amounts, and the expected payoff date. If an assessment is tied to critical repairs that haven't been completed, the project is ineligible.
- No "Unavailable" flag. A project marked Unavailable in Fannie's Condo Project Manager system can't be financed through Fannie, no matter which review path is used.
Freddie Mac's established-project standards apply the same 10% reserve minimum and the same rule against baseline funding. They also require review of structural reports from the past three years and of special assessments. Fannie's own FAQ says the standard condo questionnaire forms are optional. If the documents a lender receives aren't enough to decide eligibility, though, the lender has to get more evidence, or the loan is ineligible.
Why the state's three-story rule doesn't settle it
Many Delray owners know about Florida's post-Surfside condo laws, which require milestone inspections and structural integrity reserve studies (SIRS). According to the state's condominium division, milestone inspections apply to residential condo buildings with three or more habitable stories. The first inspection is generally due at 30 years and then every 10 years after that. The SIRS requirement uses the same three-story threshold.
So an owner in a two-story garden building may reasonably decide the state rules don't apply to them. The lender test works differently. Fannie's Full Review covers attached units in established condo projects, and the eligibility table doesn't mention building height. A low-rise association with no milestone inspection due can still fall short of the 10% reserve test or the delinquency limits. If it does, a conventional loan on any unit in that project is off the table.
The Real Deal's August 9 report quoted Robert Smith, a regional president at FirstService Residential. He said the new scrutiny makes financing harder for older buildings with reserve or major-repair needs, and that associations that act early may benefit.
Where Delray's buyer mix makes this bite
The impact on a seller depends on how many local buyers pay cash. The most recent official Delray ZIP code breakdown covers all of 2025. It's older than current monthly data, but it's useful for seeing how each part of the city's condo market was built:
| Delray ZIP, 2025 full year | Condo/townhouse closings | Paid in cash | Approx. cash share | Median sale price |
|---|---|---|---|---|
| 33444 | 127 | 79 | 62% | $342,500 |
| 33445 | 306 | 154 | 50% | $225,000 |
| 33446 | 437 | 336 | 77% | $138,250 |
| 33483 | 244 | 179 | 73% | $825,000 |
| 33484 | 502 | 351 | 70% | $155,000 |
In 2025, roughly half of the condo closings in 33445 were financed. In 33446, the ZIP that includes the Villages of Oriole area west of Delray, financed buyers were about one in four. That makes them the marginal buyer, and with fewer active buyers, losing that slice can hurt more. Countywide, cash made up 57.2% of existing condo sales in July 2026. Even so, a large share of buyers still need a loan, and those buyers now depend on the association passing review.
The broader market leaves little room to absorb lost buyers. In August 2026, Palm Beach County recorded 765 condo sales, down 6.71% from a year earlier, at a median price of $300,000. Inventory stood at 5,770 active listings, which the release puts at 6.7 months of supply, a balanced market. Condo sellers received a median 93% of their original list price, and the median time from listing to contract was 69 days, compared with 74 days a year earlier. In a balanced market, a listing that only cash buyers can purchase is competing with a smaller group of buyers.
What a Delray paper trail looks like right now
An association that publishes its records shows what a lender would be reading. Huntington Lakes Section IV, at 7320 Amberly Lane in the Villages of Oriole, posts its milestone repair documents for owners. An owner letter dated February 27, 2025 said the association was seeking a $1,942,835 line of credit for milestone repairs, with quarterly owner payments toward the special assessment expected to start in July 2025. The association's inspection reports page lists a special assessment approved at a board meeting on May 25, 2025. A contractor's progress report for the week ending October 2, 2026 shows restoration still underway at Buildings 29, 30 and 32, including stucco, expansion joints, catwalk railing bolts and post-tension pocket grouting.
Records like these are exactly what Full Review requires a lender to examine. That means the assessment's purpose, its remaining balance, its payoff date, and whether the repairs behind it are finished. An association that keeps these documents organized and current can answer a lender quickly.
Two dates on the calendar
The state deadline comes first. DBPR says associations with a milestone inspection due on or before December 31, 2026 may complete their SIRS at the same time, by December 31, 2026. Budgets adopted from January 1, 2025 onward can't waive the reserves the SIRS requires.
Five days into the new year, the lender standard tightens. For loan applications dated on or after January 4, 2027, Fannie Mae and Freddie Mac raise the minimum budgeted replacement reserve from 10% to 15%. An association that just clears 10% today could fall short for a buyer who applies in January.
South Florida mortgage professional Melissa Cohn described the first weeks under the new rules to The Real Deal:
"A lot of these buildings don't have the financial capacity to increase their reserves to 15 percent."
The same report said lenders are waiting longer for association documents. It also said more buildings are failing agency thresholds, which pushes buyers toward non-QM loans that usually carry higher rates, and that Cohn expects compliant buildings to sell at a premium.
Where the state disclosure package and the lender file overlap
Florida law already requires a resale seller to hand over many of the same records a lender will review. Under section 718.503 of the Florida Statutes, a seller who isn't the developer provides the following at the seller's expense: the declaration, articles, bylaws and rules, the latest annual financial statement and budget, any applicable milestone inspection summary, and the most recent SIRS or a statement that it isn't complete. Under HB 913, the buyer can then cancel within seven days of signing the contract and receiving those documents, not counting weekends and legal holidays. The previous window was three days.
As a result, the budget that a buyer's lender tests for 10% reserves is also in the buyer's hands during the cancellation period. If the association's documents are gathered before listing, the seller sees the same numbers the buyer and the lender will see.
FAQ
Does the August 3 change affect cash buyers? No. The project review is a requirement for conventional loans sold to Fannie Mae and Freddie Mac. Cash buyers still receive the state-required disclosure package, and its seven-day cancellation window still applies.
Are FHA loans an alternative? Rarely, at least in South Florida right now. MIAMI REALTORS reports that only 21 of 2,397 condo buildings across Miami-Dade, Broward and Palm Beach counties are FHA-approved, citing HUD figures.
Has the rule been delayed? The National Association of Mortgage Brokers asked for an extension of at least 12 months. In June, an FHFA spokesperson told National Mortgage News that Fannie and Freddie were implementing on schedule, and the change took effect August 3.
If you own a Delray Beach condo and plan to sell before or after January 4, the first step is a careful read of your association's budget, reserve study and assessment records, just as a buyer's lender will read them. Daniel Maya reviews those documents before a listing goes live, so you can price and time the sale with a clear picture of who can actually close. Request a Confidential Market Consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
