Warrantable condos meet Fannie Mae/Freddie Mac guidelines — think enough owner-occupancy (typically 50%+), no single entity owning more than 10% of units, adequate HOA reserves, no pending litigation, and limited commercial space. These qualify buyers for conventional loans with lower down payments (as little as 3-5%) and better interest rates.
Non-warrantable condos fall outside those guidelines — maybe it’s a building with too many investor-owned units, a new development still in its first year, an HOA involved in a lawsuit, or a project with mixed-use commercial space. These don’t disqualify a buyer from financing, but they do mean a portfolio loan or non-QM lender instead of conventional — usually with a larger down payment (10-25%), a somewhat higher rate, and sometimes cash-only in tougher cases.
Why it matters: A condo can look perfectly move-in ready and still hit a financing wall at underwriting if nobody checked its warrantability status upfront. Buyers waste weeks. Sellers lose deals they thought were solid.
If you’ve got a condo listing or you’re eyeing one to buy, let’s check its status before it becomes a surprise at the lender’s desk. Also, there are other things to think about in terms of cost. How much dollars a sq. ft. is the HOA? Reach out if you have questions.
