AD Mortgage data shows more than half of Florida condo loans used limited review, the process being eliminated August 3
As the August 3 deadline approaches for changes to Fannie Mae and Freddie Mac condominium project eligibility requirements, the mortgage industry continues to both lobby for delays and rollbacks and share the real-world impact of these changes.
The latest pushback came from Florida-based AD Mortgage. Its origination data suggests the impact on Florida buyers will be considerable.
Since 2021, AD Mortgage has originated 1,434 conventional condominium loans in Florida, of which 757 loans, or 52.8%, were underwritten using the limited review process that the new guidelines will eliminate. Another 41.4% used full review, and 5.8% received a condo review waiver.
Corey Chubner (pictured top), senior vice president of government affairs and investor relationships at AD Mortgage, said the data reflects what the company brought to the Federal Housing Finance Agency in a letter to FHFA Director Bill Pulte dated July 1.
"The concern is that what would otherwise be very creditworthy borrowers will get squeezed out of the opportunity to utilize conventional financing for a condo with these changes in the guidelines," Chubner told Mortgage Professional America. "Getting rid of limited review and then upping the reserve requirements. Oftentimes it's first-time homebuyers that are getting into condos, empty nesters. There's a particular need for condos for a segment of the homebuying population."
Benefits of limited review
Limited review represented roughly 30% of AD Mortgage’s Florida condo originations in 2022, grew to nearly 60% by 2025, and remained above 50% in 2026. In 2025 alone, AD Mortgage closed 394 Florida condo loans through limited review compared to 245 through full review.
The change is likely to make the process both more expensive and time-consuming for borrowers, Chubner said.
"The limited review process, it's faster, it's easier, it's cheaper, and it allows the borrower to qualify for the conventional product without having to jump through so many hoops," he said. "And when you eliminate limited review and the borrower has to go through full review, it takes longer, it costs more."
He also said something that has been echoed by National Association of Mortgage Brokers (NAMB) president Kimber White. Borrowers could spend a considerable amount of their own money up front, only to find the loan doesn’t qualify for conventional financing.
"The borrower will have to spend some money on this full review process, and then the project may not qualify under full review," Chubner said. "So now the borrower is going to be out dollars and then not have the keys to the front door."
New guidelines increase required project reserve funding from 10% to 15%, phased in with a second increase planned for early 2027. In the 12 months ending June 19, 2026, AD Mortgage found that 25 of the 82 condominium projects it reviewed through manual lender certification, or 30.5%, had reserve funding below the new threshold.
White estimated that roughly 80% of Florida condos do not currently meet the 10% reserve threshold. Chubner said the reserve shortfall translates directly to special assessments for existing condo owners.
"You can hit them with a four-figure, five-figure special assessment to make up the difference to get to that 15% reserves, and then it goes up again," he said. "So you could be faced with another special assessment."
Hurting affordability
If the guidelines take effect without modification, Chubner said the impact on the Florida market will be significant.
"It doesn't help to unfreeze the market because there won't be as large a pool of available would-be buyers to buy the condo that is for sale," he said. "But also from an affordability standpoint, if the borrower isn't able to get into the condo through a conventional loan, they'll be pushing into non-QM, which is a great product, but it's a little bit more expensive for the borrower."
The company has not yet received a formal response to its letter. Chubner noted it is not alone in pressing the issue, with NAMB, the Community Home Lenders of America, and the Community Associations Institute having jointly written to Director Pulte.
Chubner said brokers who work with condo borrowers should get engaged through their associations before the August 3 effective date.
"Have your voice be heard, get involved with your associations," he said. "Building a coalition around this issue and highlighting the real-world impact. The brokers are going to see it first because their borrowers aren't going to qualify. And providing that information to the associations, providing it to folks like me, and then we can effectively be the megaphone."
Chubner said the initiative is about dialogue, not obstruction.
"If it is to the detriment of consumers, then it's our responsibility to bring that to the forefront and then have that discussion, that dialogue, to see if there is a fix, a workaround," he said.
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