The condo cliff is no longer theoretical. First anecdotes are hitting forums — primarily from Florida — of deals falling through because buildings did not pass Full Review. Here is what is happening and what Bergen and Hudson County buyers need to know.
What's Happening in Florida
The first reports are coming in from Florida, where the combination of post-Surfside structural reform, rising insurance costs, and the new Full Review requirements is creating a perfect storm. These are not isolated incidents. They are early signals of a market-wide shift.
- First reports of deals falling through due to Full Review failures. Buyers who thought they had a deal are finding out at the lender review stage that their building does not qualify for conventional financing. The deal collapses, and the buyer is back to square one.
- Buildings with low reserves, high delinquency rates, and pending litigation are the most affected. These are the same red flags that Fannie and Freddie's new rules are designed to catch. The buildings that were marginal under Limited Review are now failing under Full Review.
- Buyers are losing deposits and wasting months. The worst cases are buyers who wrote contracts without a financing contingency that accounted for project review failure. They are out their earnest money, out their inspection costs, and out months of time.
- The condo cliff is real — and it is happening now. The change took effect August 3, 2026. We are now seeing the first transactions that started under the new rules reach the review stage. The deals that are falling through are the canary in the coal mine.
What This Means for Bergen and Hudson County
If you think this is a Florida problem, think again. The same rules apply to every building with 11+ units in the country. Here is what it means for our market.
- Every building with 11+ units faces the same scrutiny. The riverfront towers in Edgewater, the high-rises in Fort Lee, the waterfront condos in Weehawken and West New York — all of them are now subject to Full Review. If a building in Florida can fail, a building in Bergen County can fail too.
- Buildings with financial issues will struggle to sell. If your building has low reserves, a high delinquency rate, pending litigation, or a master policy deductible above $50K, you are at risk. Sellers in those buildings will have a harder time finding qualified buyers.
- Buyers need to verify warrantability BEFORE writing an offer. This is the single most important lesson from the Florida anecdotes. Do not write a contract on a condo until you know the building passes Full Review. Your lender can check warrantability before you commit. Use that option.
- The 5-point buyer checklist is now essential, not optional. Every buyer looking at a condo in a building with 11+ units needs to run through the checklist before they make an offer. It is no longer a nice-to-have. It is a must-do.
The Building-Category Checklist
This checklist applies to every building, regardless of location. No specific names. Just the categories that determine whether a building passes Full Review.
- Reserve study current under 36 months? If the building has not had a reserve study in the last three years, it may not pass. The lender needs to see that the association has a plan for funding future repairs.
- Master policy deductible at or below $50K? Fannie and Freddie now cap individual unit owner deductible assessments at $50,000. If the building's deductible exceeds this, the buyer's lender may not approve the loan.
- HOA delinquency under 15%? If more than 15% of units are delinquent on their HOA fees, the building is considered high-risk. This is a common point of failure for buildings with financial stress.
- No pending structural litigation? If the building is involved in litigation over structural issues, it will not pass Full Review. This is a hard stop for most lenders.
- Collection rate above 95%? The association's ability to collect fees is a key metric. A collection rate below 95% signals financial instability and will raise red flags with underwriters.
If any answer is no, the building may not pass Full Review. That does not mean you cannot buy there. It means you need to plan for it — either by working with a lender who can do portfolio lending, paying cash, or understanding that the pool of qualified buyers will be smaller if you ever need to sell.
The Under-Covered Angle
There is one aspect of the new rules that almost no one is talking about, and it is a significant advantage for certain buyers.
- 10-unit-or-fewer buildings qualify for full Waiver of Project Review. This is a huge deal. Buildings with 10 units or fewer are exempt from the Full Review requirements entirely. That means every boutique building, every small walk-up, every low-rise with a handful of units still qualifies for conventional financing without the new scrutiny.
- This is a significant advantage for boutique buildings. If you are looking at a 6-unit building in Cliffside Park or a 9-unit building in Palisades Park, you have a structural advantage over buyers looking at the 200-unit tower next door. Your building does not need to pass Full Review. Theirs does.
- Most agents and buyers are not aware of this. The narrative around the condo cliff has focused on the buildings that are affected. Almost no one is talking about the buildings that are not. If you are a buyer looking for a condo, the 10-unit-and-under market is suddenly more valuable than it was a week ago.
This is not about picking winners and losers. It is about understanding the landscape. The rules have changed, and the buyers and agents who understand the new terrain will make better decisions. The ones who do not will be the next anecdotes on the forums.