You spot the perfect view in downtown Sarasota, then your lender says the building is “non‑warrantable.” Now what? In 34236, where many condos are older waterfront towers alongside new luxury builds, this comes up more than you’d expect. You still have options, and with the right plan you can close with confidence. This playbook shows you how to confirm status fast, compare financing paths, and protect your deal in today’s market. Let’s dive in.
What non‑warrantable means
A condo is non‑warrantable when it does not meet eligibility rules used by Fannie Mae and Freddie Mac, so standard conforming loans are off the table. That shrinks your lender choices and often raises down payments and rates. You can review the core project rules in Fannie Mae’s condo project requirements overview.
Common triggers include too many rentals, low reserves, pending HOA litigation, incomplete construction, heavy commercial or hotel-like operations, and insurance gaps. These factors, summarized by lenders and insurers, often drive non‑warrantable calls for Florida condos (overview of typical reasons). When a project is flagged, lenders may decline late in escrow unless you pivot to specialty financing.
Why 34236 buyers should care
Sarasota County’s condo market softened in 2024–2025, with rising inventory, longer time to contract, and price pressure. That makes financing friction more consequential for both sides in 34236 (local market snapshot).
Florida’s post‑Surfside safety laws added milestone inspections and structural reserve requirements for many associations. In the near term, this has pushed special assessment risk higher and brought more buildings under scrutiny, which can influence warrantability (statewide safety context). Fannie Mae also maintains an internal “Condo Unavailable” list, and Florida is heavily represented, so early verification is essential (background on the list).
Check a building fast
- Ask your lender to run a project review early. If conforming financing is your plan, you want clarity in days, not weeks.
- Pull key HOA documents: current budget, year‑end financials, reserve study, 6–12 months of board minutes, master insurance certificates, and any special assessment notices.
- Confirm FHA and VA status. Use HUD’s FHA condo search and a VA‑focused resource to locate VA‑approved projects or learn approval steps (VA condo tool overview).
Financing options in 34236
Conventional when eligible
If the project is warrantable, conforming loans usually offer lower rates and down payments. Many buyers can put 3–5 percent down depending on the program and profile. The catch: the building must pass project review.
FHA and VA paths
FHA allows project approvals and, in some cases, single‑unit approvals under strict criteria. Start by checking HUD’s list and be ready to supply HOA documents. VA buyers typically need a VA‑approved complex, so verify status early or consider alternatives.
Portfolio and non‑QM loans
Many banks and specialty lenders finance non‑warrantable condos as portfolio or non‑QM loans. Expect higher rates and more money down than conforming. Representative programs often allow 65–80 percent loan‑to‑value for purchases, with pricing and credit standards that reflect building risk (program snapshot; additional program features).
Jumbo options
For higher price points, jumbo and portfolio jumbo lenders may accommodate non‑warrantable buildings with stronger documentation and larger down payments. Shop multiple lenders to compare terms.
Bridge, HELOC, or cash
If timing is tight, buyers sometimes use a bridge loan, a HELOC on another property, or cash to close, then refinance later if the project’s status improves. These are usually more expensive short term, so weigh costs carefully.
Offer strategy that works
- If a building is non‑warrantable, price and terms should reflect a smaller buyer pool. Sellers can expect more cash or portfolio buyers and potentially longer marketing times.
- Buyers should secure a preapproval for the exact program they will use. Do this before waiving contingencies.
- Both sides benefit from transparent HOA documentation up front. That reduces surprise denials and renegotiations.
Due‑diligence checklist
Request from the HOA or manager
- Declaration, bylaws, articles, and amendments.
- Current budget, year‑end financials, and reserve study with funding details.
- Board minutes for the past 6–12 months and any special assessment notices.
- Master insurance certificates, including wind and flood if applicable, plus the association’s insurance agent contact.
Verify with public sources
- FHA status via HUD’s condo search and, if relevant, VA approval.
- Any known inspection or structural integrity orders tied to Florida’s milestone rules.
Ask the right questions
- Owner‑occupancy and rental percentages.
- Reserve funding level and timing of the last reserve study.
- Pending or threatened litigation and expected financial impact.
- Current or upcoming special assessments and collection schedules.
Contract terms to protect you
- Tie the financing contingency to the loan type you intend to use, not just “any financing.”
- Add a short deadline for lender project review and HOA document delivery. If the building is flagged, allow cancellation or price credits.
- Require the seller to disclose special assessments, litigation, and insurer or government notices.
For sellers in 34236
- Lead with transparency. Share complete HOA financials, reserve study highlights, and current insurance declarations with buyers.
- If the board can address fixable issues like insurance gaps or reserve funding, pursue updates and communicate progress in your marketing.
- Adjust pricing and concessions for a smaller buyer pool or target buyers using viable portfolio programs. A practical prep list is outlined in this non‑warrantable seller guide.
Work with a local advisor
Non‑warrantable situations are solvable, but they require early verification, the right lender fit, and tight contract language. If you are buying or selling in 34236, you deserve a calm, concierge process that protects your goals and timeline. For tailored guidance and vetted lender introductions, connect with the Salaverri Windsor Group.
FAQs
What makes a condo non‑warrantable in Sarasota?
- Projects can be flagged for high rental ratios, low reserves, incomplete construction, litigation, condotel features, or insurance gaps. See Fannie Mae’s project requirements for the core standards.
How much down payment is typical for non‑warrantable loans?
- Many portfolio programs require 15–25 percent down, with stronger borrowers sometimes reaching 20 percent down near 80 percent LTV; pricing and terms vary by lender (program example).
Can FHA single‑unit approval help in an unapproved building?
- It can in some cases, but criteria are strict and documentation heavy; start with HUD’s FHA condo search and ask your lender if the unit qualifies.
What should VA buyers do if the condo is not VA‑approved?
- Check the VA condo approval tool early; if not approved, you may need a different building or a non‑VA portfolio option with higher costs (VA tool overview).
How do I avoid last‑minute loan denials?
- Have your lender run the project review immediately, gather HOA documents in week one, and tie your financing contingency to the exact loan type you plan to use.
