diff --git a/.changes/unreleased/Features-20250925-171652.yaml b/.changes/unreleased/Features-20250925-171652.yaml
new file mode 100644
index 00000000000..ed433d95574
--- /dev/null
+++ b/.changes/unreleased/Features-20250925-171652.yaml
@@ -0,0 +1,6 @@
+kind: Features
+body: 'Validate {{ config }} in SQL for models that don''t statically parse '
+time: 2025-09-25T17:16:52.76822-04:00
+custom:
+    Author: michelleark
+    Issue: "12046"
diff --git a/core/dbt/parser/base.py b/core/dbt/parser/base.py
index b1ade3cf4b4..ecb2581f80b 100644
--- a/core/dbt/parser/base.py
+++ b/core/dbt/parser/base.py
@@ -463,10 +463,14 @@ def config_dict(
         self._mangle_hooks(config_dict)
         return config_dict
 
-    def render_update(self, node: FinalNode, config: ContextConfig) -> None:
+    def render_update(
+        self, node: FinalNode, config: ContextConfig, validate_config_call_dict: bool = False
+    ) -> None:
         try:
             context = self.render_with_context(node, config)
-            self.update_parsed_node_config(node, config, context=context)
+            self.update_parsed_node_config(
+                node, config, context=context, validate_config_call_dict=validate_config_call_dict
+            )
         except ValidationError as exc:
             # we got a ValidationError - probably bad types in config()
             raise ConfigUpdateError(exc, node=node) from exc
diff --git a/core/dbt/parser/models.py b/core/dbt/parser/models.py
index 0dd003d25c0..c4fdf9d0a96 100644
--- a/core/dbt/parser/models.py
+++ b/core/dbt/parser/models.py
@@ -233,7 +233,9 @@ def parse_python_model(self, node, config, context):
                 config_keys_defaults=config_keys_defaults,
             )
 
-    def render_update(self, node: ModelNode, config: ContextConfig) -> None:
+    def render_update(
+        self, node: ModelNode, config: ContextConfig, validate_config_call_dict: bool = False
+    ) -> None:
         self.manifest._parsing_info.static_analysis_path_count += 1
         flags = get_flags()
         if node.language == ModelLanguage.python:
@@ -348,7 +350,7 @@ def render_update(self, node: ModelNode, config: ContextConfig) -> None:
         # if the static parser didn't succeed, fall back to jinja
         else:
             # jinja rendering
-            super().render_update(node, config)
+            super().render_update(node, config, validate_config_call_dict=True)
 
             # if sampling, add the correct messages for tracking
             if exp_sample and isinstance(experimental_sample, str):
diff --git a/tests/functional/deprecations/fixtures.py b/tests/functional/deprecations/fixtures.py
index 1707d8950fe..6c9251480ff 100644
--- a/tests/functional/deprecations/fixtures.py
+++ b/tests/functional/deprecations/fixtures.py
@@ -10,6 +10,17 @@
 select 1 as id
 """
 
+models_custom_key_in_config_sql = """
+{{ config(my_custom_key="my_custom_value") }}
+select 1 as id
+"""
+
+models_custom_key_in_config_non_static_parser_sql = """
+{{ config(my_custom_key="my_custom_value") }}
+
+select {{ dbt.current_timestamp() }} as my_timestamp
+"""
+
 macros__custom_test_sql = """
 {% test custom(model) %}
   select * from {{ model }}
diff --git a/tests/functional/deprecations/test_deprecations.py b/tests/functional/deprecations/test_deprecations.py
index 860fc30d7af..5f33cd8c794 100644
--- a/tests/functional/deprecations/test_deprecations.py
+++ b/tests/functional/deprecations/test_deprecations.py
@@ -38,6 +38,8 @@
     deprecated_model_exposure_yaml,
     duplicate_keys_yaml,
     invalid_deprecation_date_yaml,
+    models_custom_key_in_config_non_static_parser_sql,
+    models_custom_key_in_config_sql,
     models_trivial__model_sql,
     multiple_custom_keys_in_config_yaml,
     property_moved_to_config_yaml,
@@ -374,6 +376,36 @@ def test_custom_key_in_config_deprecation(self, project):
         )
 
 
+class TestCustomKeyInConfigSQLDeprecation:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {
+            "model_custom_key_in_config.sql": models_custom_key_in_config_sql,
+        }
+
+    @mock.patch("dbt.jsonschemas._JSONSCHEMA_SUPPORTED_ADAPTERS", {"postgres"})
+    @mock.patch.dict(os.environ, {"DBT_ENV_PRIVATE_RUN_JSONSCHEMA_VALIDATIONS": "True"})
+    def test_custom_key_in_config_sql_deprecation(self, project):
+        event_catcher = EventCatcher(CustomKeyInConfigDeprecation)
+        run_dbt(
+            ["parse", "--no-partial-parse", "--show-all-deprecations"],
+            callbacks=[event_catcher.catch],
+        )
+        assert len(event_catcher.caught_events) == 1
+        assert (
+            "Custom key `my_custom_key` found in `config`"
+            in event_catcher.caught_events[0].info.msg
+        )
+
+
+class TestCustomKeyInConfigComplexSQLDeprecation(TestCustomKeyInConfigSQLDeprecation):
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {
+            "model_custom_key_in_config.sql": models_custom_key_in_config_non_static_parser_sql,
+        }
+
+
 class TestMultipleCustomKeysInConfigDeprecation:
     @pytest.fixture(scope="class")
     def models(self):