A financed offer on a Key Biscayne condo now has to clear a review of the building before the unit itself matters. Since August 3, 2026, the shortcut that let lenders approve conventional condo loans without a close look at the association's books no longer exists. Most condos for sale on the island sit in buildings put up between 1961 and 1981. That puts a gap between buyers who borrow and buyers who pay cash, and the gap shows up at the start of a deal, long before the appraisal or the walkthrough.
Fannie Mae announced the change in a March 18, 2026 lender letter called "Retirement of the Limited Review process." Established projects that used to qualify for Limited Review now go through Full Review, or through a Waiver of Project Review where they qualify. The rule covers loan applications dated on or after Aug. 3, 2026. Freddie Mac made the matching change the same day in Bulletin 2026-C by retiring its Streamlined Review. Established projects there now move to the Established Project or Reciprocal Review types, or to "Exempt From Review" if they qualify.
What the lender now opens before it looks at the unit
The two review types look at very different amounts of material.
| Limited Review, before Aug. 3, 2026 | Full Review, now | |
|---|---|---|
| Association finances | No close look at the budget | Budget has to set aside at least 10% for replacement reserves |
| Reserve study as a substitute | Not part of the test | Accepted only if the budget funds the study's highest recommendation. "Baseline" funding that lets reserves approach zero is not accepted |
| Delinquencies | Not examined in depth | HOA fee and special assessment delinquencies each capped at 15% of units 60 or more days past due |
| Inspection reports | Not required | Lender reviews any structural or mechanical inspection report from the prior three years |
| Insurance | Not part of the review | Lender confirms project property, liability and fidelity coverage |
According to Fannie Mae's project standards FAQ, lenders can use HOA minutes, financial statements and engineer reports to judge pending repairs and special assessments. A building with no recent inspection report does not need to commission a new one. The standard condo questionnaire is optional. If the answers leave out information the lender needs, though, the lender has to get it elsewhere, or Fannie Mae will not buy the loan.
The change applies nationwide. Retiring Limited Review also ends the remaining Florida geographic restrictions, and the rule is triggered by the application date. WTOP described the new rule as a full financial review for every condo over 10 units. The agency documents still keep the waiver, exemption and reciprocal paths.
Why this matters more on the island than across the causeway
Key Biscayne's condo stock is weighted toward older buildings, and its oldest towers are among its best-known addresses. Islander News gives these construction years:
| Building | Year built |
|---|---|
| Island House | 1961 |
| The Sands | 1969 |
| Commodore Club East | 1971 |
| Casa del Mar | 1971 |
| The Towers, two 14-story buildings, 538 units | 1972 |
| Commodore Club West | 1973 |
| Commodore Club South | 1974 |
| Mar Azul | 1974 |
Key Colony adds four large buildings from the same period. Oceansound, with 310 units, dates to 1979. Emerald Bay, with 285 units, dates to 1980, and Botanica, with 291 units, to 1981. Tidemark, with 282 units, appears as both 1978 and 1981 in published building records.
Current listings follow the same pattern. In an MLS snapshot taken Sept. 25, 2026 and reported by Islander News, 71 of the 88 active condo listings sorted by build year were in buildings finished before 1998. Only 17 were in buildings finished in 1998 or later. The 1998 cutoff is the year Miami-Dade's own recertification rule uses.
The Sept. 25 snapshot also shows which buildings are carrying capital costs. Of the 101 active Key Biscayne condo listings that day, 23 declared a special assessment, 65 declared none, and 13 left the field blank. Older listings declared assessments at a rate of 28.2%, compared with 17.6% for newer ones. The samples are small, with only 20 of the 71 older listings and 3 of the 17 newer listings answering the question. The same report notes that the field reflects what the listing agent entered, so a blank cannot be read as "no."
A declared assessment does not mean a building is unsafe. Associations levy these charges for concrete restoration, roofs, seawalls, elevators, insurance or catching up on reserves, and many well-run buildings carry one because they are doing that work. An earlier Islander News report described The Sands' assessment, which owners could pay as $50,000 upfront or $1,100 a month over five years, alongside concrete restoration and required sprinklers. That figure is historical and should not be taken as the building's current bill.
Who the review applies to
Project review applies only when a mortgage is involved. The Miami Herald put it plainly in April: the agency standards "have no impact on cash deals that do not require financing."
In Miami-Dade, cash already accounts for a large share of condo deals. MIAMI REALTORS reported that 50.5% of existing condo sales were cash in August 2026. For borrowers, the 30-year fixed rate averaged 6.67% that month and reached 7.17% as of Sept. 15, 2026. Government-backed financing offers few alternatives. The same release says only 21 of the 2,397 condo buildings in Miami-Dade, Broward and Palm Beach counties are approved for FHA loans, or 0.9%.
So the rule mostly affects the financed buyer in an older building. The Real Deal wrote that the association's financial health now has a bigger effect on whether a deal goes through, "as long as a mortgage is involved." The outlet also quoted Robert Smith of FirstService Residential, who said financing will be harder in older buildings still working through reserve funding or large capital projects such as "roofs, concrete restoration, installing hurricane windows and modernizing elevators." In the same piece, the outlet expected associations that had planned ahead to benefit, with that premium possibly "baked into the pricing."
Time and cost add more friction. In an Aug. 5 report, The Real Deal wrote that the change could slow or kill deals in buildings without enough reserves. Before the change took effect, HousingWire reported that trade groups warned mandatory Full Reviews would add documents, third-party review fees and processing time, with some borrowers facing more than $1,000 in added costs.
Supply makes all of this matter more. Miami-Dade had 12.1 months of condo inventory in August 2026, a buyer's market by the association's own definition, and condos sold for a median 94% of original list price. With that much choice, a seller weighing two offers at the same price can treat the one subject to a project review as the less certain one.
The reserve test tightens again in January
The current threshold will not last long. For applications dated on or after Jan. 4, 2027, the minimum replacement-reserve allocation under Fannie Mae's budget test rises from 10% to 15%. Freddie Mac's bulletin makes the same change. A building that meets 10% today may not meet 15% on its next budget. In a 1970s tower whose association set its 2026 budget before these rules were final, the timing of that budget can decide whether a financed sale is possible.
The order in which a lender works through a Key Biscayne building under Full Review looks roughly like this:
- Budget, to see whether at least 10% goes to replacement reserves, or whether a reserve study is used in its place and the budget funds the study's highest recommendation.
- Delinquency figures for both regular fees and special assessments, against the 15% cap.
- Any structural or mechanical inspection report from the past three years, along with minutes and engineer reports that describe pending work.
- Proof of property, liability and fidelity insurance for the project.
For buildings that already recertified, much of this paperwork exists. The Village of Key Biscayne's recertification page explains the notice, report review and repair process that older buildings go through. The new step is that a lender now reads those reports as part of underwriting a single unit.
Frequently Asked Questions
Does the waiver help any Key Biscayne buildings? Fannie Mae's waiver covers new and established projects of 10 or fewer units, and projects of 5 to 10 units cannot be part of a larger development or master association. Freddie Mac's exemption covers eligible 2 to 10 unit projects under a similar condition. The large towers and Key Colony buildings listed above are far over that size.
What about a loan application dated before Aug. 3, 2026? According to Fannie Mae's FAQ, those applications still follow the archived Florida Limited Review limits on LTV, CLTV and HCLTV. Applications dated on or after Aug. 3 cannot use Limited Review.
Does a declared special assessment rule out financing? The rules contain no automatic bar. Full Review looks at whether owners are behind on assessments, against the 15% delinquency cap, and lenders review documents describing repairs and assessments. How a specific building does depends on its own figures.
For a Key Biscayne condo, the association's budget, reserve study and inspection history now help decide whether a financed buyer can close at all. At Maruja Gil, we look at those building documents together with the price, in English, Spanish or Portuguese, so owners and buyers know how a lender is likely to read the building before an offer goes in. Request your complimentary home valuation, and we'll include an assessment of how your building stands under the current review rules.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
