The fight to make Florida more affordable

Florida continues to attract new residents from other states, particularly New York, and the influx has raised home prices in the largest cities as well as the surrounding smaller enclaves. The Florida Association of Mortgage Professionals (FAMP) is focused on two initiatives — a property tax amendment and a condo rule change — to address the affordability challenges facing the state.

In an interview with HousingWire, FAMP President Orlando Diaz, a 30-year Florida mortgage veteran, said higher mortgage rates, rising taxes and HOA costs are squeezing buyers and existing condo owners, especially retirees on fixed incomes.

“You can’t really legislate interest rates and and housing prices, but you can legislate insurance and taxes, so that’s where the association is focused,” Diaz said.

Florida affordability under pressure

Diaz said migration from higher-cost states has pushed demand and prices not just in Miami, Tampa and Orlando, but also in markets like Cape Coral, Port St. Lucie and Brandon. More than 870,000 people moved to Florida in 2024, according to Census data, with 50,000 of that number from New York. The median list price in Florida is down by ~2% year over year according to HousingWire data, coming in at $482,000. However, several ZIP codes in Port St. Lucie show median prices as $505,000 to $519,000.

On the property insurance front, insurance costs have improved as more carriers return to the state and recent hurricane seasons have been less damaging, but property taxes continue to weigh on residents.

FAMP is supporting a constitutional amendment on the November ballot that would eventually eliminate property taxes on a portion of primary residences by phasing in higher homestead exemptions. The measure, which needs 60% voter support, includes a five-year residency requirement for new arrivals and protections for essential services such as education. Diaz said the outcome could materially change payment calculations for Florida borrowers.

Diaz also pointed out the importance of requiring five years of residency to get the benefit, which prevents a rush of migration from people in tax-heavy states, which could raise home prices even more.

“You have to be living here for for five years in order to be able to start getting a credit on your taxes, and the taxes are also being phased in. So the homestead exception is going to start being raised little by little until a certain percentage of primary homes, people will not have any taxes at all,” Diaz said.

Fannie, Freddie condo changes raise alarms

When it comes to priorities on federal policy-making, FAMP is most concerned about FHFA’s decision to end the “limited review” process for condos and raise required reserves for condo associations from 10% to 15% starting Jan. 1, 2027.

Previously, Florida faced a 25% down payment requirement on limited-review condo loans versus the 10% that was required in other states. For two years, FAMP lobbied alongside Florida Realtors and U.S. Rep. Byron Donalds to align Florida with other states, but instead, FHFA removed limited review nationwide.

“We did a full-on blitz in order to say ‘this is not fair, change it,’ and we got word like a couple days before the new mortgagee letter came out that there was going to be a change and we were super excited!” Diaz said. ‘Then all of a sudden, they said, ‘You know what? We’re just going to get rid of limited review altogether.’ And so we were successful in the fact that we’re no longer under a separate rule because it’s now the same for everybody, but in that process, Fannie Mae and Freddie Mac thought that it was easier to remove limited review altogether than to make Florida in line with the rest of the states. It was brutal for us.”

Limited review has been a key avenue to finance units in buildings that can’t clear full review. Diaz warned the shift, combined with higher reserves, could push many condos out of the conforming market and into non-QM. Non-QM lenders typically cap LTVs at 90%, compared with 95% to 97% for conforming loans, meaning bigger down payments, higher rates and higher costs for borrowers in an environment already strained by affordability.

15% reserves and a shrinking buyer pool

Reforms put in place after the Surfside condo collapse in 2021 already forced many Florida condo associations to adopt or increase reserves, often through higher HOAs or special assessments. Diaz said jumping from 10% to 15% by 2027 is “a huge, huge” change that risks blindsiding older or less sophisticated associations.

Fannie and Freddie will accept professional reserve studies showing lower needs, but Diaz said many boards are “very antiquated” and may not be aware of the 2027 deadline. Owners could discover their building is ineligible for conforming financing only when they try to refinance or sell.

Diaz warned that assessments to meet higher reserves could force some fixed-income owners to sell into a market where fewer buyers qualify, increasing the odds of distressed sales. “You’re limiting your pool of the people who can buy,” he said.

Lobbying for time — and FHA’s role

FAMP is working with the National Association of Mortgage Brokers (NAMB) and Realtor groups, including the National Association of Realtors (NAR) to push for two key changes:

• Extend limited review for at least six to eight more months to allow additional lobbying and education.
• Delay the 15% reserve requirement from 2027 to 2028.

Diaz estimated the odds of success at roughly “50-50” but said FAMP plans an aggressive push, including potential trips to Washington.

“If we can push this to 2028, that would be give the associations time to be able to put it in their budgets. It would also give us time to lobby to try to make the change because 15% is a lot for for reserves — and we were having problems with that already at the 10% level. So this is this could be a huge problem for condos in in in Florida,” Diaz said.

The group is also exploring a “full-on press” to get FHA to approve more Florida condo projects. FHA’s low down payment and flexible credit standards make it an important entry point for first-time buyers, yet Diaz said “FHA is not a player at all in Florida when it comes to condos.”

Joint efforts include a housing summit with Rep. Donalds and aligned government affairs agendas to present a unified message on affordability and condo financing.

“We haven’t had a better relationship than now than we have,” Diaz said.

Diaz said FAMP, which represents about 55,000 licensees in its 66th year, is centering its advocacy on affordability for both originators and consumers.