Financing Distressed Florida Condos in 2026

47.5% of Miami-Dade condo sales closed all cash in July 2026.

That is not a preference. It is a financing vacuum — and it is the single most important number for anyone underwriting Florida condos right now.

The Discount Is a Lending Problem, Not a Building Problem

Florida's post-Surfside reserve laws forced thousands of buildings to price forty years of deferred maintenance at once. When a milestone inspection escalates or a reserve study lands a large shortfall, the association votes a special assessment. At that point most banks stop lending on the entire building, and Fannie Mae and Freddie Mac won't buy the paper.

The buyer pool collapses to cash. And cash bids low.

You can see it in one county's numbers. Per MIAMI REALTORS' July 2026 report, published August 17:

Same county. Same month. Opposite directions. Above six months of supply is a buyer's market, and the condo side is sitting at double that with active listings down 11.79% year over year — sellers pulling units rather than meeting the bid.

The units didn't get worse. The financing did. That distinction is the whole opportunity.

What the Law Actually Requires

Three pieces of Florida law drive this, and investors routinely conflate them.

Milestone inspections (Fla. Stat. 553.899). Condominium and cooperative buildings three or more habitable stories tall must complete a structural inspection at 30 years from the certificate of occupancy, then every 10 years. A Phase 1 visual pass escalates to a Phase 2 investigation when the engineer finds substantial structural deterioration. Note that the old automatic 25-year trigger for buildings within three miles of the coast was removed by Senate Bill 154 in 2023 — a local enforcement agency may still require 25 years based on local conditions, but it is discretionary now, not statewide.

Structural Integrity Reserve Studies. Senate Bill 4-D, passed in the 2022 special session after the Champlain Towers South collapse, created both the milestone requirement and the SIRS. A SIRS prices remaining useful life and replacement cost for the roof, load-bearing structure, foundation, fireproofing, plumbing, electrical, waterproofing and exterior. The completion deadline was December 31, 2025 — that date has passed, so any building you look at today should have one.

House Bill 913, effective July 1, 2025. This is the piece most investors have wrong. HB 913 lets an association pause reserve contributions for up to two consecutive budget years immediately following a milestone inspection, so cash goes to the actual repairs instead of the reserve account. It requires approval by a majority of all voting interests, applies only to budgets adopted on or before December 31, 2028, and a new SIRS must be completed before normal contributions resume. HB 913 also allows reserves to be funded through a line of credit or a loan rather than assessments alone.

What HB 913 is not is a waiver. Funding for SIRS-covered components remains non-waivable. A pause is a timing deferral tied to milestone repairs — read the board minutes to find out which one you're looking at.

Why the Agencies Say No

Fannie Mae reviews the project, not just your unit. Its Project Standards guidance makes a project ineligible when the building fails a state or local mandatory structural inspection, or shows advanced physical deterioration of load-bearing structures, mold or water intrusion. Special assessments cannot substitute for required replacement reserves. And once a project carries an Unavailable status in Condo Project Manager, loans in it are not eligible for purchase regardless of review type.

Two 2026 changes matter for anyone modeling an exit:

• Limited Review was eliminated effective August 3, 2026 (Fannie Mae Lender Letter LL-2026-03). The lighter-touch project review path that some condo loans used to take is gone. Every project goes through full review now.
• The replacement reserve minimum rises from 10% to 15% of budgeted assessment income effective January 4, 2027. Buildings that barely clear the bar today may not clear it in January.

Freddie Mac runs a parallel process through Condo Project Advisor with a "Not Eligible" designation. Neither list is public, which is exactly why board minutes and the estoppel matter more than any database you can buy.

The scale of it: as of March 2025, reporting on the confidential GSE list put 1,438 Florida buildings among 5,175 nationally — roughly 28% of the entire national list in one state, with about 696 in Miami-Dade, Broward and Palm Beach. No refreshed count has been published since.

The Trade, in Four Steps

Investors making money in this market do one thing differently. They underwrite the assessment as acquisition cost, not as a surprise.

1. Read a year of board minutes before you bid. Minutes tell you what is coming — the engineer's Phase 2 findings, the contractor bids, the vote that hasn't happened yet. The estoppel letter only tells you what has already been voted and what the unit owes today.
2. Add the assessment to your purchase price. A $240,000 unit carrying a $52,000 repair assessment is a $292,000 unit. Illustrative, but that is the number every return calculation should start from.
3. Buy with short-term private capital while banks say no. A bridge loan underwrites the unit, the sponsor and the exit rather than the project's agency eligibility.
4. Refinance once the building qualifies again. When the repairs are complete, the SIRS is refreshed and the project clears review, the unit becomes financeable — and a DSCR loan from 6.75% takes out the bridge. That refinance is the entire thesis; if you can't articulate what makes the building financeable again and roughly when, you don't have a deal.

Pull These Before You Bid

That last line kills more condo deals than the assessment does. A building that just voted a two-year minimum lease term has changed your rental underwriting whether or not you noticed. Our guide to investment property insurance requirements covers the binder side in detail.

Where Rates Sit Right Now

For context on the refinance exit: the 30-year fixed averaged 6.71% in Freddie Mac's September 3, 2026 survey. The 10-year Treasury closed at 4.79% and SOFR at 3.65% on September 2 (Federal Reserve H.15). Bridge pricing follows the short end; 30-year DSCR money follows the long end. That spread is why the buy-with-bridge, refinance-to-DSCR sequence works — the deal moves from one curve to the other once the building is financeable.

Get a Read on Your Building

Send us the address, the assessment amount and the board minutes, and you'll have a term sheet in about 2 hours. Fix and flip from 8.75%, up to 90% LTC. DSCR from 6.75% for the takeout. Close in 5–10 business days. 45 states — everywhere except VT, UT, OR, SD and ND.

We fund where banks won't. On Florida condos, that is not a slogan — it is most of the market.

Terms are subject to underwriting, appraisal, title, and insurance. This article is general information, not legal advice; condominium statutes and association documents are fact-specific, so have counsel review any building before you commit.

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