A full review condo has passed a comprehensive questionnaire regarding reserves, litigation, and delinquencies, meeting all Fannie Mae and Freddie Mac requirements. This allows borrowers to put down as little as 3-5% on a primary residence with standard mortgage insurance. A limited review condo has not met all of these requirements, often due to insufficient reserves, pending litigation, or missing documentation. In Florida, limited review condos are typically capped at 75% LTV on the first mortgage, meaning you would need at least 25% down unless you use a piggyback second mortgage strategy to reduce your cash requirement. Understanding which review category your condo falls into is the most important first step in determining your financing options.
Florida condo associations are now required to maintain adequate reserves for structural integrity and major repairs. Following the tragic Surfside building collapse in 2021, Florida enacted significant legislation (SB 4-D and subsequent laws) requiring milestone structural inspections for buildings three stories or taller that are 25 to 30 years old, depending on proximity to the coast. Associations must fund reserves based on these inspection findings and can no longer vote to waive reserve funding for structural components. For mortgage financing purposes, lenders evaluate whether the association maintains at least 10% of its annual budget in reserves. If reserves fall below this threshold, the condo typically falls under limited review status, which significantly impacts down payment requirements and available financing options.
Yes, a piggyback loan (also known as a second mortgage or combo loan) is one of the most effective strategies for Florida condos under limited review. Since limited review condos cap the first mortgage at 75% LTV, adding a second mortgage can bring the combined loan-to-value (CLTV) up to 85-90%, reducing your out-of-pocket down payment significantly. For example, on a $500,000 condo under limited review, instead of putting $125,000 down (25%), you could structure a 75% first mortgage ($375,000) plus a 15% second mortgage ($75,000), bringing your actual cash down payment to just $50,000 (10%). The second mortgage will typically carry a higher interest rate than the first mortgage, but the overall blended rate is often still favorable compared to depleting your savings for a larger down payment.
The maximum LTV for a limited review condo is typically 75% for the first mortgage on both primary residences and second homes. Investment properties are generally not eligible for limited review financing at all. However, by using a piggyback second mortgage, borrowers can achieve a combined loan-to-value (CLTV) of up to 90% for primary residences and up to 85% for second homes. This means that while your first mortgage cannot exceed 75% of the purchase price, the total of both loans combined can cover up to 90% of the property value. For full review condos, the LTV limits are much more favorable: up to 97% for primary residences, 90% for second homes, and 85% for investment properties, with no need for a piggyback structure.
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