What’s the new deductible rule for Florida condos?

Florida Condo Buyers & Sellers Alert

Buying or Selling a Condo in Florida? One Insurance Number Can Now Make or Break Your Deal

A quiet new lending rule just changed which condo buildings qualify for normal financing — and which ones don’t. Here’s what it means for your purchase, your sale, and your building’s value.

Quick Answer:

Fannie Mae now caps the per-unit deductible on a Florida condo building’s master insurance policy at $50,000 for all required perils, including wind — mandatory for loan applications dated July 1, 2026 or later. If your building’s deductible is higher, buyers can’t get conventional financing there, which shrinks the buyer pool and can hurt values.

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“Hey Google, what’s the new deductible rule for Florida condos?”

As of July 1, 2026, Fannie Mae requires Florida condo master policies to carry a per-unit deductible of $50,000 or less on all required perils to remain eligible for conventional financing.

What Actually Changed — In Plain English

Every condo building carries a master insurance policy that covers the structure — the roof, the walls, the common areas. Like any insurance, it has a deductible: the amount the association (meaning the owners, collectively) pays out of pocket before insurance kicks in after a loss.

Fannie Mae just set a hard limit on how big that deductible can be per unit: $50,000, across all required perils — including wind and named storm coverage. Freddie Mac matched the rule. It became mandatory for any loan application dated on or after July 1, 2026.

Why does this matter? For years, many South Florida buildings kept insurance premiums — and your HOA fees — manageable by accepting much higher deductibles, sometimes well above this new cap. That trade-off is no longer allowed if the building wants its units to qualify for normal 30-year financing. If your building is over the limit, it becomes what lenders call “non-warrantable” — and that word affects your money directly.

If You’re Buying a Condo

Before you fall in love with a unit — and definitely before you write an offer — the building’s master policy deductible needs to be confirmed. If it’s over $50,000 per unit, conventional, FHA, and VA financing are off the table for that building. Your options become Non-QM, portfolio, DSCR, or Foreign National loans: typically 25% or more down and a meaningfully higher interest rate.

The worst version of this story is discovering the problem in underwriting: inspection paid, appraisal ordered, moving trucks half-booked — and week five, the lender says the building doesn’t qualify. Checking this number early costs you a phone call. Checking it late can cost you the deal and your deposit timeline.

If You’re Selling — or You Own a Condo

This rule affects your unit’s value even if you’re not selling this year. If your building’s deductible exceeds the cap, most financed buyers can no longer buy there. Your realistic buyer pool shrinks to cash buyers and a smaller group of Non-QM borrowers — and a smaller buyer pool almost always means downward pressure on price and longer days on market.

Two things to do now. First, find out your building’s current deductible before you list — pricing and marketing a unit in a non-warrantable building is a completely different strategy, and your agent needs to know on day one. Second, if the building is over the cap, raise it with your board. Associations across South Florida are renegotiating their master policies right now precisely because of this rule, and owner pressure is what moves that conversation.

One more item for every condo owner: your personal HO-6 policy. If the master policy carries a per-unit deductible, you’re expected to carry an HO-6 that covers at least that deductible or the cost to restore your unit’s interior, whichever is greater. Worth a call to your insurance agent to confirm you’re aligned.

How to Find Your Building’s Deductible

Ask Your Real Estate Agent to Pull It

This is now standard homework before any condo offer or listing. A good agent knows exactly who to call and what document to ask for — it usually takes one or two calls.

The Property Management Company

Often the fastest path. The management company handles the insurance renewals and can usually confirm the current deductible on wind and all required perils within minutes. Many also have a recently completed lender questionnaire on file from another sale in the building.

The Association’s Insurance Agent — Certificate of Insurance

The Certificate of Insurance (COI) for the master policy typically shows the deductible structure, including wind and named storm. The agent who wrote the policy can produce it quickly.

Your Condo Documents Package

Some associations include an insurance summary or reference the deductible within the standard financial disclosures sellers are required to provide to buyers in Florida.

Budget Documents & Board Meeting Minutes

If you own in the building, you already receive these. Deductible levels usually come up at budget time because they directly affect what owners could be assessed after a storm — check the minutes from the most recent budget approval.

In practice, two calls resolve this about 90% of the time: the management company, and the association’s insurance agent.

What It Means for Your Wallet: Warrantable vs. Non-Warrantable

Factor Building Under the Cap Building Over the Cap
Loan Types Available Conventional, FHA, VA Non-QM, Portfolio, DSCR, Foreign National
Typical Down Payment As low as 3-5% Often 25%+
Interest Rate Standard market rate Meaningfully higher
Who Can Buy Your Unit The full market of buyers Cash buyers and qualified Non-QM borrowers only

$50,000

Max per-unit deductible allowed

July 1, 2026

Mandatory effective date

All Perils

Including wind/named storm

Frequently Asked Questions

What is the new $50,000 deductible cap for Florida condos?

Fannie Mae now caps the per-unit deductible on a Florida condo building’s master property insurance policy at $50,000 for all required perils, including wind. The rule became mandatory for loan applications dated on or after July 1, 2026, and Freddie Mac issued a matching rule.

What happens if my building’s deductible is higher than $50,000?

Units in the building can no longer be financed with conventional 30-year loans through Fannie Mae, Freddie Mac, FHA, or VA. Buyers must use Non-QM, portfolio, DSCR, or Foreign National programs — typically larger down payments and higher rates. That shrinks the buyer pool and can affect unit values.

How do I find out my building’s master policy deductible?

Ask the property management company or the association’s insurance agent for the current Certificate of Insurance — it shows the deductible structure. Your real estate agent can also request a recently completed condo questionnaire. The figure may also appear in board minutes, the annual budget, or the condo document package.

I’m selling my condo — when should I check this?

Before you list, not after you’re under contract. If your building is over the cap, your pricing and marketing strategy need to reflect that from day one — and it’s a conversation worth taking to your board, since associations are renegotiating master policies right now because of this rule.

Does my HO-6 policy need to change because of this rule?

If the master policy carries a per-unit deductible, unit owners are expected to maintain an HO-6 policy covering at least the greater of that per-unit deductible or the amount needed to restore the unit’s interior. Call your insurance agent and confirm your current HO-6 coverage lines up.

This information is for educational purposes and reflects rules as issued. Lender guidelines and effective dates can be updated — always confirm current deductible requirements with your lender and the association’s insurance agent before buying, selling, or making insurance decisions.

Joaquin Gutierrez

Florida Licensed Real Estate Broker — BK0625118 · Founder, JGRES

Serving Miami-Dade, Broward & Palm Beach Counties