Condo loans depend on the building as well as the buyer. A warrantable condo meets Fannie Mae or Freddie Mac project standards and qualifies for conventional financing. A non-warrantable condo doesn't, often because of single-owner concentration, litigation, commercial space, budget or reserve issues, or hotel-like rental features. Non-warrantable condos can still be financed through portfolio and non-QM lenders, usually with a larger down payment.
Common reasons a condo is non-warrantable
- One owner or entity holds too many units
- The HOA is involved in significant litigation
- A high share of commercial space
- Weak reserves, a high delinquency rate or deferred maintenance
- Hotel-style operations or short-term rental features
Check the building early
Send Kristen the address before you write an offer. She can find out how lenders view the project so you know your financing options and down payment before you commit.
FHA and VA also maintain their own condo approval lists. Some buildings are approved for one program and not another.
Common questions
Can I get a loan on a non-warrantable condo?
Yes. Portfolio and non-QM lenders finance non-warrantable condos, typically with a larger down payment and different pricing than conventional loans.
Can I use FHA or VA for a condo?
Yes, if the project is on the FHA or VA approved list, or qualifies under FHA's single-unit approval process.