How To Finance Boca Condos With Portfolio Lenders

Buying a Boca condo but hitting a wall because the building is called “non‑warrantable”? You’re not alone. Many communities in Boca Raton and across Palm Beach County have older buildings, special assessments, or paperwork gaps that make conforming loans hard to secure. This guide walks you through how portfolio lenders work, why they can be a fit for Boca condos, and the exact steps to prepare a winning loan file. Let’s dive in.

Portfolio lending, in plain English

Portfolio lenders are banks or credit unions that keep your mortgage on their own books instead of selling it to Fannie Mae or Freddie Mac. Because they hold the risk, they set their own condo rules. That flexibility can help when a building does not meet standard Fannie Mae condominium project criteria or HUD’s FHA condominium approval rules.

What this means for you: a portfolio lender may approve a Boca condo loan even when conforming or FHA/VA financing will not. In exchange, expect different terms such as a larger down payment, a higher rate, or extra cash‑reserve requirements.

Why Boca Raton buyers choose portfolio loans

Boca Raton and the West Palm Beach–Boca Raton–Delray Beach area include many coastal and older condo buildings. Associations may be managing special assessments, high insurance costs, or investor concentration. After the Surfside tragedy in 2021, lenders also pay closer attention to structural reports and reserve funding under the Florida Condominium Act (Chapter 718).

Flood and wind exposure also matter in Palm Beach County. If a property is in a FEMA Special Flood Hazard Area, lenders will require flood insurance. You can check zones at the FEMA Flood Map Service Center. Associations sometimes carry policies with wind-only coverage or high deductibles, which underwriters will review closely.

When a portfolio lender may say yes

Common non‑warrantable triggers in Palm Beach County

• High investor or short-term rental concentration compared to owner-occupancy.
• Ongoing litigation, especially involving structural issues or insurance claims.
• Low reserves, outdated or missing reserve studies, or frequent special assessments.
• Commercial or mixed-use elements that exceed conforming limits.
• High owner delinquency rates on dues, or unclear association financials.
• Insurance concerns, such as limited master coverage or very high deductibles.

A portfolio lender can sometimes work around these issues with compensating factors, like strong credit, a bigger down payment, and documented reserves.

What terms to expect

• Down payment: Many portfolio lenders require 20 to 30 percent down for higher‑risk buildings; healthier associations may allow less.
• Rates and fees: Rates are usually higher than comparable conforming loans. Pricing varies by lender and building risk.
• Debt‑to‑income and reserves: DTI may be similar or tighter than conforming. Extra reserves are common for condos.
• Loan types: Fixed and adjustable‑rate options are typical. Some community banks offer specialty terms.
• Timeline: Internal underwriting can move quickly, but condo reviews often add 1 to 3 weeks based on HOA responsiveness.

Your Boca condo financing checklist

Association and building documents

Request these right after your offer is accepted. The seller or HOA/management company can supply them.

• Declaration of condominium, bylaws, rules and regulations.
• Current operating budget, balance sheet, and profit and loss statements.
• Most recent reserve study and evidence of reserve funding.
• Board meeting minutes for the last 12 to 24 months.
• Master insurance certificate with coverage, limits, and deductibles.
• List and status of any special assessments, plus any pending assessments.
• Summary of litigation, liens, or judgments involving the association.
• Owner‑occupancy and rental percentages, and management contact details.
• Any known FHA/VA/GSE approval status for context.

Your borrower documents

• Income and employment documents, tax returns, and recent pay stubs.
• Bank and asset statements showing down payment and reserves.
• Credit report authorization and identification.
• Gift documentation if applicable.

Key numbers lenders calculate

• Loan‑to‑value ratio based on your down payment.
• Debt‑to‑income ratio, including HOA dues and any special assessments.
• Association delinquency rate and reserve adequacy.

Step‑by‑step timeline in Palm Beach County

1. Early prequalification: Talk to a few portfolio lenders and conventional lenders to compare options. If the condo is likely non‑warrantable, prioritize lenders with condo expertise.
2. Offer and contract: Include a finance contingency and allow time for condo document review.
3. Request the HOA package: Do this immediately after contract acceptance. Fast HOA responses keep the timeline on track.
4. Lender condo review: Underwriter reviews the association documents and may issue conditions.
5. Appraisal and underwriting: The appraisal is ordered and underwriting continues. You may be asked for extra reserves or proof of assessment payment plans.
6. Closing: Once conditions are met, the lender funds the loan and services it in‑house.

For county resources on inspections and permitting, see the Palm Beach County Building Division.

Smart risk checks for coastal condos

• Verify flood zone and required flood insurance through the FEMA Flood Map Service Center.
• Review the master insurance policy, including wind coverage and deductibles.
• Study the reserve report and recent capital spending to gauge future assessments.
• Read recent board minutes for signs of structural repairs, legal actions, or budget shortfalls.
• Confirm owner‑occupancy versus investor ratios, since this can affect lender terms.

Pros and cons of portfolio financing

Pros

• Can finance condos that conforming or FHA/VA programs will not approve.
• More flexible underwriting with room for compensating factors.
• Potentially faster, relationship‑based decisions.

Cons

• Often higher rates, fees, and larger down payments.
• Terms vary by lender, which means more shopping and comparison.
• Future refinancing into conforming programs still depends on the condo’s eligibility.

Plan your refinance path

If you hope to refinance into a conforming or FHA/VA loan later, remember that building eligibility still applies. Review standards from Fannie Mae and HUD, and confirm whether the association expects to meet those criteria. If not, your loan may stay in portfolio longer than planned.

Buyer tips for the West Palm Beach–Boca Raton–Delray Beach area

• Start early and request the full HOA package as soon as you are under contract.
• Compare a few portfolio lenders, since pricing and LTV limits vary. Use the CFPB guidance on shopping for a mortgage to organize questions.
• Budget for higher cash needs, including potential flood and condo insurance costs.
• Work with a local, condo‑savvy agent who can spot red flags in minutes and keep the process moving.

Ready for a clear path to closing?

You deserve straightforward guidance and a calm, organized process. With boutique, high‑touch representation and deep local knowledge of Boca Raton and nearby coastal communities, you can navigate HOA reviews, insurance questions, and portfolio lending choices with confidence. If you’re planning a move or second‑home purchase, let’s talk about your goals and timeline.

Schedule a complimentary consultation with KDMRealtor to get started.

FAQs

What is a portfolio lender for Boca Raton condos?

• A portfolio lender is a bank or credit union that keeps your mortgage on its own books and sets its own condo rules, which can help when a building is not eligible for conforming or FHA/VA financing.

How do portfolio loans differ from conforming loans in Palm Beach County?

• Portfolio lenders can be more flexible on condo project issues but often require larger down payments, higher rates, or extra reserves to offset risk.

Will I need flood insurance for a Boca condo near the coast?

• If the property is in a FEMA Special Flood Hazard Area, flood insurance is required, and some lenders require it in coastal zones even outside mapped areas; check the FEMA Flood Map Service Center.

Can I use FHA or VA if the condo is not approved in Boca Raton?

• No, FHA and VA require project approval; if the condo lacks it, you would need a conventional or portfolio loan or pay cash.

How large is the typical down payment with portfolio lenders?

• Many portfolio lenders ask for 20 to 30 percent down on higher‑risk condos, while healthier associations may allow lower down payments depending on your credit profile.

How much time does condo review add to my closing?

• Plan for an extra 1 to 3 weeks, with the HOA’s speed in providing documents being the biggest factor in timing.