A growing, secretive database of ineligible condominium buildings is causing significant challenges for owners in South Florida. This list, managed by the federally chartered Fannie Mae, has expanded rapidly, making it more difficult for owners to sell their units or secure loans for critical repairs. This problem has worsened as condo associations face mounting pressure to comply with new state safety regulations.
Recent data reveals that the number of South Florida condos on the list has more than doubled in the past two years. As of March 2025, there are 696 affected buildings across Miami-Dade, Broward, and Palm Beach counties, accounting for nearly half of the total ineligible condos in Florida. These buildings are primarily disqualified due to financial, insurance, or maintenance issues. When a condo appears on the list, owners are often unable to sell their properties using conventional mortgages, and associations struggle to secure loans for necessary repairs.
Fannie Mae’s increasingly strict requirements stem from the 2021 collapse of Champlain Towers South in Surfside. Fannie Mae now mandates that condo associations submit detailed financial and maintenance reports when owners seek to sell their units. If a building is deemed to have insufficient reserves or unresolved maintenance issues, it becomes ineligible for Fannie Mae-backed financing.
Mortgage Difficulties
Fannie Mae, along with Freddie Mac, controls around 70% of residential mortgages in the U.S. These agencies maintain strict guidelines, making it difficult for buyers to secure loans for properties on the ineligible list. While non-conforming mortgages are available, they tend to be more expensive and harder to obtain. Cash deals, however, remain unaffected, which is a common alternative in South Florida’s condo market.
How Condos End Up on the List
Condominiums are added to this confidential list for a variety of reasons, including lack of proper insurance, structural issues, excessive delinquencies in payments, or high rental percentages. After the Surfside tragedy, Fannie Mae heightened its scrutiny of older condos, requiring in-depth reports detailing building conditions. These new regulations were put in place to avoid the risks associated with financing buildings that may have hidden, severe maintenance or financial problems.
Reasons for being on the list:
- Structural or safety concerns: Buildings with unaddressed structural issues or safety hazards.
- Insufficient reserves: Condo associations with inadequate funds to cover maintenance and repairs.
- Pending litigation: Projects facing legal issues that could pose financial risks.
- Insurance issues: Condos that don’t meet Fannie Mae’s insurance requirements.
- High investor ownership: Condos with a high percentage of investor-owned units, which can be less appealing to lenders
Despite the increasing visibility of this list, Fannie Mae has not made it publicly accessible, leaving many condo associations unaware of their status until a lender rejects a financing application. Though it’s possible for condos to be removed from the list, the process can be lengthy and complicated.
Consequences of being on the Blacklist:
- Difficulty selling: Condos on the list can be harder to sell because potential buyers may struggle to get mortgages.
- Stalled sales: Loan denials can stall sales or refinancing attempts.
- Alternative financing: Buyers may need to resort to alternative financing options, such as non-conforming loans or cash purchases, which can be more expensive and harder to qualify for.
Financial Stress and Legislative Challenges
In addition to Fannie Mae’s stricter regulations, Florida’s state legislature introduced new laws in 2023 and 2024 requiring condo buildings over three stories tall to undergo regular inspections and build sufficient reserve funds for major repairs. These changes have placed significant financial strain on many older condos, which were previously allowed to waive reserve fund requirements. With rising insurance rates and the urgent need for structural repairs, many associations are struggling to meet these new obligations.
The financial burden has become overwhelming for some, as increasing special assessments for repairs and skyrocketing insurance costs strain budgets. Simultaneously, the market for selling these units has become more difficult, with many condos stuck in a cycle of rising fees and declining sales.
A Shift Towards Bulk Buyers and Investors
This financial pressure could lead to an increase in bulk condo sales to investors. Industry experts predict that legislative changes may ease bulk buyer rules, making it easier for investors to purchase troubled properties. This shift could offer a way out for struggling associations but also signal a change in the condo market.
The Secret List
The existence of this ineligible list first gained public attention in 2023, when condo associations began noticing higher rejection rates for loans. While initially thought to be a recent development, it has since been revealed that the list has been maintained by Fannie Mae for at least 21 years.
Despite its growing impact, Fannie Mae has disputed the characterization of the list as a “blacklist” and has not publicly released its contents. However, efforts are being made to provide greater transparency and assistance to condo associations facing these challenges.
Getting off the list
It’s possible to get removed from the Fannie Mae “blacklist”, but it can be labor intensive process.