The Florida Association of Mortgage Professionals pushes for condo guideline changes

Florida homebuyers are facing the same affordability challenges that other housing markets are grappling with, but with added regulatory hurdles if they want to buy a condo. The Florida Association of Mortgage Professionals (FAMP), which is hosting its annual convention this week in Orlando, is addressing those challenges head-on, looking to improve the Florida housing market for homebuyers and the mortgage professionals who serve them.

Orlando Diaz, president of Metro Fund and president of FAMP, sat down with HousingWire Editor in Chief Sarah Wheeler to talk about the trade organization’s priorities. First on the list? Lowering the down payment requirements on condos to match the rest of the nation.

“We have a huge affordability problem in Florida — we’re being hit on all fronts,” Diaz said.  “Home prices are through the roof right now, insurance is hard to get, interest rates are high, although they are starting to come down a little bit, and property taxes are also very high.

“In order to work on this affordability issue, we feel that this one guideline change — because it’s not even a bill, it would be a guideline change from Fannie Mae and Freddie Mac — would do a lot for affordability. Especially for those individuals who are living in condos and want to sell their property now, but the condo isn’t qualified yet for a full review. They’re kind of stuck, because somebody has to put 25% down to buy their condo.”

The GSEs imposed stricter down payment guidelines on Florida condos after the 2008 financial crisis. Financing a condo requires qualifying the building, through either a full review or a limited review, and in most of the country, buyers can put as little as 3-5% down after a full review or 10% down under a limited review. But in Florida, buyers of a condo under a limited review have to put 25% down.

While the guidelines may have been warranted after 2008, Diaz said, they don’t make sense after the condo reform laws following the collapse of the Champlain South Tower in 2021. In the aftermath of that tragedy, which killed 98 people and highlighted condo safety issues after decades of deferred maintenance, Florida law now requires condos to have milestone inspections and maintain funding reserves for repairs.

Condo owners are bearing the burden of these additional costs, which can run into the hundreds of thousands of dollars. While these laws were being debated, FAMP worked with state legislators to give home owners associations (HOAs) more time to meet these requirements and soften the blow to condo owners, many of them elderly.

Those costly new regulations improve condo safety — and should decrease the risk faced by Fannie Mae and Freddie Mac on condo loans. With those new guardrails in place, the 25% downpayment requirement should be changed to match other states, Diaz said.

“We don’t want to be treated any different than the rest of the country. We are geo-targeted with this one guideline change that only affects Florida,” Diaz said. “Yes, we have hurricanes, but other places have tornadoes, fires or earthquakes.”

FAMP has joined forces with Florida Realtors and Miami Realtors associations to lobby the FHFA and found a listening ear in Rep. Byron Donalds, a Republican from Bonita Springs who has written to FHFA Director Bill Pulte on the issue. Diaz noted the Trump administration has given Florida housing leaders a new to hope for progress.

“The climate in D.C. today is a little bit different, and we have an FHFA director that is that is actually making a lot of bold moves, including recognizing a different credit score model and adding crypto to home purchases. So we feel that the environment is there for this type of change, and remember — all we really want is just to be treated like the rest of the country,” Diaz said.

Another priority for FAMP is making sure first responders, health care workers and teachers can afford to buy homes in Florida, Diaz said. FAMP worked to get a downpayment assistance program called Hometown Heroes passed again for the second year.

“It used to be $100 million, now it’s $50 million and that goes really fast,” Diaz said. “So we’re advocating to put that back to 100 and maybe even go up to $200 million to help first responders and teachers have some down payment assistance when buying a home.”

Diaz said improving affordability is what underpins all of FAMP’s advocacy. “We’re pushing for issues that are going to improve the Florida housing market and give consumers better options.”