Investor concentration
Too many units are rentals rather than owner-occupied. The agencies set occupancy thresholds for established projects; investor-heavy buildings — often exactly the ones investors want — can fall outside them.
DSCR subtopic · condos
The condo is fine. The building is the problem.
“Non-warrantable” means Fannie Mae and Freddie Mac won’t buy a loan on the project — usually because it’s investor-heavy, in litigation, short on reserves, or runs like a hotel. Most lenders stop there. Tiaira doesn’t. Here’s what triggers it, how it gets financed, and how to find out before you write the offer.
my lender just backed out 2 weeks before closing — 'the condo isn’t warrantable.' what does that even mean??
It means the building failed the agency checklist, not you. Send me the HOA questionnaire. There are programs built for exactly this — let’s see if we can save your closing date.
Warrantable, defined
What “warrantable” means and why it matters
A warrantable condo is one whose project — the whole building and its HOA — meets Fannie Mae and Freddie Mac eligibility rules, so a lender can sell the loan to them. That access is what makes condo financing cheap. A non-warrantable condo fails one or more of those rules, so the loan has to be held in a lender’s portfolio or sold to a Non-QM investor instead. Different money, different terms, same unit.
The usual suspects
Eight things that make a condo non-warrantable
Thresholds vary slightly between Fannie and Freddie and change over time; these are the patterns Tiaira sees most.
Single-entity ownership
One person or entity owns more than the agency limit of the units (commonly 10% in larger projects, two units in small ones). Common in buildings where a developer or investor kept a block of units.
Commercial space
More than roughly 35% of the project’s square footage is commercial or non-residential — the ground-floor-retail building with condos above.
Litigation
The HOA is suing or being sued over structural issues, construction defects, or safety — the agencies treat most of these as disqualifying until resolved.
Thin reserves or delinquencies
The HOA budget sets aside less than 10% for reserves, or more than 15% of units are 60+ days behind on dues. A deferred-maintenance or special-assessment history raises the same flags.
Condotels & short-term rental ops
Buildings with a front desk, daily rentals, mandatory rental pools or hotel-style amenities are treated as condotels — ineligible for agency financing regardless of the unit itself.
New or developer-controlled
Construction isn’t complete, the project isn’t sold out past the required threshold, or the developer still controls the HOA. Common in new-build towers.
Structural / safety deferrals
Post-2021 agency rules require review of structural inspections and significant deferred maintenance. A building that can’t produce clean answers goes non-warrantable.
How it gets financed
Non-warrantable condo loan characteristics
Typical, not guaranteed. The project review drives the final terms; Tiaira confirms the current guidelines for your building.
- Down payment: 20–25%+ typical
- Credit: 680+ typical
- Occupancy: Primary, second home or investment
- Review: Full project review on every file
- Terms: 30-yr fixed & ARM options
- Income: Full doc, bank statement, or DSCR on investment units (program dependent)
Straight answers
Non-warrantable condo FAQ
What is a non-warrantable condo?
A condominium project that does not meet Fannie Mae or Freddie Mac eligibility standards, so loans on it cannot be sold to the agencies. Common reasons include high investor concentration, single-entity ownership over the limit, excess commercial space, HOA litigation, inadequate reserves, condotel operation, or incomplete/developer-controlled projects. The unit itself may be perfect — the building is the issue.
Can I still get a mortgage on a non-warrantable condo?
Yes. Non-warrantable condos are financed with portfolio and Non-QM loans that are held or sold outside the agencies. Expect a larger down payment, a higher rate than a warrantable condo, and a full project review. Tiaira works these regularly for both investors and owner-occupants.
How do I know if a condo is warrantable before I write an offer?
Ask the listing agent for the HOA questionnaire, budget, reserve study and any litigation disclosure, and send them to Tiaira before you write. She can usually tell you within a day whether the project will pass agency review or needs the non-warrantable route — and price both.
What down payment does a non-warrantable condo loan require?
Typically 20–25%+ typical, depending on occupancy, credit and the specific project risk. Investment units and condotels sit at the higher end.
Can a non-warrantable condo be a DSCR loan?
On some programs, yes — a DSCR loan on a non-warrantable condo combines the rent-based qualification with the non-warrantable project review. Condotels and buildings with short-term-rental operations are the trickiest; Tiaira will tell you which programs allow them.
Will a non-warrantable condo be hard to sell later?
It can narrow your buyer pool, because future buyers face the same financing limits. Buildings can also become warrantable over time (as owner-occupancy rises or litigation resolves) or lose eligibility. Price that risk into your offer.
Is a non-warrantable condo loan a bad loan?
No — it is a specialty loan for a specialty building. The terms reflect project risk, not borrower risk. Many investors deliberately buy in investor-heavy buildings because that is where the rental demand is.
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply.
Got a building in question? Send the questionnaire.
Tiaira will tell you whether it passes agency review — and if it doesn’t, what the non-warrantable route costs. Before you write the offer, not after.