Buying a Condo in Florida: What Changed After SB 4-D
Florida's 2022–2023 condo reform laws changed what lenders will finance — and many buyers don't find out about six-figure special assessments or reserve deficits until their loan is denied.
What Florida SB 4-D Actually Requires
Florida SB 4-D (2022) and its follow-up SB 154 (2023) imposed major new obligations on condo associations for buildings 3 stories or taller:
- Structural Integrity Reserve Studies (SIRS): Required for all covered buildings by December 31, 2024. Studies assess the condition and remaining useful life of structural components: roof, load-bearing walls, floors, foundation, fireproofing, plumbing, and electrical.
- Mandatory reserve funding: As of January 1, 2025, associations may no longer waive or reduce reserves for SIRS-covered components. Buildings that waived reserves for decades now face mandatory catch-up contributions.
- Milestone inspections: Buildings 30+ years old (25 years within 3 miles of the coast) must complete a milestone structural inspection. Buildings that fail Phase 1 must proceed to Phase 2 engineering assessment.
The Surfside effect: The 2021 Champlain Towers collapse in Surfside directly triggered this legislation. Buildings statewide discovered they had been underfunding reserves for structural components for years. The gap between what was set aside and what is now required has produced special assessments ranging from $10,000 to $150,000+ per unit in affected buildings.
The 4 Things That Kill Condo Financing in Florida
Pending or recently approved special assessments trigger lender scrutiny. Fannie/Freddie guidelines flag buildings with assessments over a threshold relative to unit value. The assessment may transfer to the buyer at closing — get full disclosure in writing before signing.
Fannie Mae and Freddie Mac require condos to fund reserves at a minimum level relative to total budget. A building with less than 10% of budget in reserves is considered "critically underfunded" and may be ineligible for conventional financing. Post-SB 4-D, many FL buildings are in this category.
Fannie/Freddie require at least 35–50% owner-occupants (varies by project type). High investor ratios — common in FL vacation markets — can make a building ineligible. Ask your lender to run a CPM check before you invest time in a deal that can't close.
If the HOA is in litigation (suing the developer, being sued by unit owners, or insurance disputes), many lenders will not approve financing. Litigation status must be disclosed on the condo questionnaire — but you can also check FL court records before asking.
The Condo Questionnaire: What Your Lender Is Really Asking
Fannie Mae, Freddie Mac, FHA, and VA each require a completed condo questionnaire before approving financing on any unit in a condominium project. The questionnaire goes to the HOA or management company, not the seller. Key questions:
- Is the building involved in any current or pending litigation?
- Are there any special assessments currently approved or pending?
- What percentage of units are owner-occupied vs. investor-owned?
- What is the current reserve fund balance as a percentage of the annual budget?
- Has the building had any deferred maintenance or structural concerns identified?
- Is more than 35% of the building's square footage commercial/non-residential?
An uncooperative HOA that won't return the questionnaire — or one that returns it with red-flag answers — can kill your financing entirely. Build extra time into the contract for questionnaire turnaround.
VA and FHA approval: VA loans require the entire condo project to be on the VA approved list — search at benefits.va.gov/homeloans/condos.asp. FHA has a similar HUD approval database. Post-SB 4-D, some FL buildings lost VA/FHA approval when reserve studies revealed structural deficits. Verify before going under contract — not after you're emotionally invested.
Documents to Request Before You Sign a Condo Contract
Under FL §718.111(12), sellers must provide these within 14 days of written request. Ask for them before you go under contract, not after:
- Declaration of Condominium and all amendments
- Bylaws and rules and regulations
- Current operating budget and most recent audited financial statements
- Most recent Structural Integrity Reserve Study (SIRS)
- Board meeting minutes — last 12 months minimum
- Written disclosure of all pending or approved special assessments
- Estoppel certificate (confirms no outstanding HOA balances on the unit)
- Current owner-occupancy percentage
FL Condo Buyer's Due Diligence Checklist
- Verify lender eligibility first. Have your lender run a CPM check and confirm VA/FHA status if you're using those programs — before you tour, not after you're under contract.
- Read board meeting minutes. Twelve months of minutes will reveal planned assessments, disputes, deferred maintenance, and the real mood of the building — information that won't appear in the questionnaire.
- Calculate your true monthly cost. HOA dues + special assessment installments + mortgage + taxes + insurance. Post-SB 4-D, many FL buildings have increased dues 30–80% to fund mandatory reserves.
- Order a general inspection. Condo inspections typically cover your unit and any limited common elements (balcony, AC, water heater). The inspector cannot access structural components in common areas — that's what the SIRS is for.
- Check flood insurance requirements. FL condos in FEMA flood zones may require separate flood policies. Master HOA policies typically cover the building structure but not your unit contents or interior improvements.
FL Condo SB 4-D Buyer Guide — Printable Checklist
SB 4-D reserve requirement explainer · Special assessment red flag checklist · Condo questionnaire translator · Document request template · Lender eligibility pre-check guide · FL §718 disclosure rights summary. Created by a licensed FL real estate professional.
🛒 Get the Condo Buyer Guide on EtsyAlso: FL First-Time Home Buyer Toolkit