What actually goes wrong with a condo building
Buying a condominium means buying a share of a business as well as a home. Reserves, litigation, deferred maintenance and a state-mandated structural report can each stop a loan on a unit that is itself perfectly fine. This is a reference to 24 conditions — what each one is, how you find out, and whether it will actually block your financing.
Most of it will not stop your loan
Every page here leads with a verdict, because the useful question is not whether a building has problems — every building has problems — but whether this one reaches a lender. Most do not. We say which.
Most of what you will read about this is out of date
Fannie Mae retired Limited Review and Freddie Mac retired Streamlined Review, both for applications dated on or after 3 August 2026. Fannie dropped its 50 per cent investor-concentration limit in March 2026. Fannie’s replacement-reserve minimum rises from 10 to 15 per cent for Full Reviews on applications dated on or after 4 January 2027 — so both figures are correct, at different times.
In Florida, HB 913 took effect on 1 July 2025 and is what people mean by reserve fund relief. It is funding flexibility, not exemption: structural reserves remain non-waivable. And the rule that buildings within three miles of the coast face a 25-year milestone inspection was deleted in June 2023. It is 30 years statewide.
Every threshold on this site carries the date it applies from. That is the whole point of it.
The association and the building
Project & Financial Health
Reserves, litigation, insurance, ownership concentration and governance — 12 conditions. This is what agency project review actually examines, and it is where most loans die.
Building & Physical Condition
Structure, envelope and common systems — 12 conditions. Mostly a question of what the building has deferred, and what a mandated report has already found.
Three things worth understanding first
Financing and approval
How FHA, VA, Fannie Mae and Freddie Mac each judge a project — and what changed in 2026.
How a buyer actually finds out
Each condition shows up somewhere specific — in the documents, in the budget, on a walkthrough, in the lender’s review, or in a report the state requires.
In the condo documents
4 conditionsWhat the declaration, minutes, budget and disclosures reveal.
Master policy and insurance shortfalls Developer control, phasing and turnover Pending or threatened litigation Special assessments, pending and past
In the budget or reserve study
4 conditionsWhat the association's own financial reporting shows.
Too little of the budget going to reserves No current reserve study Owner delinquency rates Underfunded reserves
On a physical inspection
9 conditionsWhat someone looking at the building can actually see.
Concrete spalling and rebar corrosion Deferred maintenance Elevators, sprinklers and life safety Envelope failure and water intrusion Parking structure condition Roof condition as a common element Aging plumbing risers and stacks Central and common HVAC systems Electrical service capacity in older towers
When the lender reviews the project
4 conditionsWhat agency project review tests for.
Short-term rentals and condotel character Single-entity ownership concentration Commercial and non-residential floor area Investor and non-owner-occupancy ratio
Through a state-mandated report
3 conditionsWhat milestone inspections and structural reserve studies surface.
Milestone inspection findings Facade and balcony safety programmes Structural Integrity Reserve Study