West Palm Beach Condo Loans Changed on August 3. The Next Deadline Is January 4.

Since August 3, 2026, most conventional mortgages on established condominium units go through a Full Review of the building's association. A lender can no longer approve the loan on the borrower's file plus a short look at the project. That was Fannie Mae's Limited Review path and Freddie Mac's Streamlined Review, and both have been retired. For a West Palm Beach condo, the buyer's credit score now matters less to whether a financed sale closes than the association's budget, reserves, and inspection history.

That changes who can buy. In August 2026, 438 of the 765 condo and townhouse sales in Palm Beach County were paid in cash. The other 327 used some form of financing, and conventional mortgages within that group are where the new review applies. A building whose file clears Full Review stays open to conventional buyers. A building whose file stalls loses them, whatever the list price.

What Limited Review Used to Let a Lender Skip

The Real Deal described Limited Review as the process that let lenders approve conventional mortgages "without a deep dive into a condo association's finances." The same report said experts expected the changes to slow the loan process and possibly kill some deals.

The cutoff is the loan application date, not the closing date. Fannie Mae's guidance says loans with applications dated before August 3 that used Limited Review still follow the archived Florida loan-to-value limits. Loans with applications dated on or after August 3 cannot be sold to Fannie under Limited Review at all. Any condo contract signed this fall falls under the new rules.

One exception covers small buildings. Fannie expanded its Waiver of Project Review to projects with 10 or fewer units, and Freddie made a matching change to its Exempt from Review option. For projects of 5 to 10 units, the waiver requires that there be no master association. A six-unit building on a side street and a 200-unit tower on Flagler Drive now go through very different underwriting.

What the Lender Is Now Reading

Under Fannie Mae's Full Review, the lender works through Condo Project Manager, documents a valid certification, and confirms the project is eligible. In practice, the file is built from the association's documents:

1. Delinquencies and budget lines. The lender checks assessment delinquencies and whether the budget carries adequate line items.
2. Replacement reserves. The current Guide sets a minimum reserve allocation of 10% of the annual budgeted assessment income.
3. The reserve study, if the budget falls short. A lender can use a reserve study instead. As of August 3, the budget must include the study's highest recommended allocation, and lenders can no longer rely on the baseline funding method, which lets the reserve balance approach zero.
4. Recent inspections. Lenders must review any structural or mechanical inspection reports completed in the previous three years. If no inspection exists, other evidence has to support a finding that there are no critical repairs.
5. Mandatory inspection results. A failed state, county, or local inspection or certification related to structural safety, soundness, or habitability makes the project ineligible until the issue is fixed and the inspection is passed.

The standard condo questionnaire is optional. If it leaves gaps, the lender has to find the missing information elsewhere. So the speed of a financed closing now depends largely on how quickly and completely the association and its management company produce documents.

The final check is the project's status. A project marked "Unavailable" in Condo Project Manager or Desktop Underwriter is ineligible for Fannie Mae purchase. Fannie does not publish these decisions. Associations, management companies, and their authorized advisors can use the Condo Status Finder, but a "No findings" result does not mean Fannie has reviewed or approved the project.

The Same Rule Loosened Several Florida Limits

The August 3 change also removed several restrictions. Fannie's lender letter says retiring Limited Review "effectively retires the remaining geographic restrictions that apply to the state of Florida." Several limits went away at once:

• Fannie retired its mandatory PERS review for new and newly converted attached condo projects in Florida, so lenders can now do a delegated Full Review.
• Freddie retired the Florida loan-to-value limits for established projects that were tied to "Certified by Lender" status.
• Fannie retired the 50% investor-concentration cap for established projects under Full Review, and Freddie retired its 50% owner-occupancy requirement for investor loans in established projects.
• Fannie had already dropped its requirement that roofs be insured at replacement cost, though roofs still have to be insured, according to The Real Deal.

A well-funded West Palm Beach building with a high share of rental units may be easier to finance now than it was in July. A building with thin reserves and no recent inspection report may be harder to finance, even if its location and floor plans are better. The rule shifts the advantage toward buildings with well-run finances.

Why Prices Are Rising While Financing Gets Stricter

The county data shows a tighter market. In August 2026, Palm Beach County condos and townhouses had 5,770 active listings, down 17.1% from August 2025. Months of supply fell from 9.0 to 6.7. The median sale price was $300,000, up 5.3% year over year.

Over the same period, the average sale price rose 10.5% and the median rose 5.3%. These are countywide figures. No West Palm Beach-only or ZIP-level series was available for this period. They also cover only one month of sales under the new review, and nearly all of those deals went under contract before August 3.

The figures miss one more thing. MIAMI REALTORS notes that new construction, pre-construction, and condo conversion sales are largely not reported in the MLS. The downtown towers drawing the most attention are outside the $300,000 median. In March 2026, The Real Deal reported South Flagler House at $700 million in presales over 90 days. It reported launch prices starting at $2.5 million at Edgeworth and $3.5 million at Mandarin Oriental Residences. The resale buildings that show up in the county data are the ones where an association's documents now control access to financed buyers.

Florida's Reserve Rules and the Lender's Are Separate Tests

Florida has its own requirements. The state's DBPR describes milestone inspections for condo buildings at least three habitable stories tall, starting at age 30 and repeating every 10 years. Where the local enforcement agency sets an earlier schedule, they start at age 25. Structural Integrity Reserve Studies are generally due every 10 years. HB 913, approved by the governor on June 23, 2025, lets a qualifying association that has completed its milestone inspection pause or reduce reserve contributions for up to two consecutive annual budgets, subject to a majority vote and other conditions. It also allows SIRS reserves to be funded through a special assessment, line of credit, or loan.

A budget that complies with state law is not automatically one that passes a lender's review. State law and Fannie's Full Review measure different things, and a pause the state allows does not change the reserve percentage a lender is checking. Visibility is also limited. The Palm Beach Post's reporting, republished by the Boca Raton Tribune, found that 17 of 39 Palm Beach County municipal building officials had not submitted required milestone-inspection data. It also reported that assessments for mandated repairs had exceeded $100,000 in some cases. For a specific building, the association's own records give a clearer picture than any public database.

Two Deadlines in One Season

January 4 is 85 days away, in the middle of peak season. Because the trigger is the application date, a buyer who applies on January 5 is underwritten against the 15% threshold even if the unit was listed in November. An association budgeting at 10% for 2027 could meet the reserve test for a December buyer and fall short for a January buyer.

FAQ

Does the Full Review requirement apply to cash buyers? No. These are rules for conventional loans sold to Fannie Mae and Freddie Mac. A cash purchase does not go through either agency's project review.

My building has eight units. Does any of this apply? Both agencies expanded their waiver options to projects of 10 or fewer units. For buildings with 5 to 10 units, the waiver requires no master association.

Will the 15% reserve rule raise association fees? The rule sets what a lender looks for in a budget. It does not set what an association must charge. How a board responds is up to the board, within Florida law.

If you own a West Palm Beach condo and are thinking about listing this season, the most useful preparation is getting the association's budget, reserve study, and recent inspection reports in hand before a buyer's lender asks for them. With a background in capital planning and reserve oversight on large buildings, Jenna Fantauzzi can review that file with you and estimate how a Full Review may treat your building before and after January 4. Let's Connect.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.