A non-warrantable condo is a condominium, condotel, or co-op that doesn't meet Fannie Mae or Freddie Mac project standards, which makes conventional financing difficult or impossible. Portfolio lenders review these buildings directly, and many will lend up to 80% of value on a primary or second home and 75% on an investment property or condotel.
This is increasingly relevant after the condo review changes covered in our Fannie and Freddie condo update.
Why a condo is non-warrantable
- Pending litigation involving the HOA
- Low or no HOA reserves
- High concentration of investor-owned or short-term-rental units
- Condotel structure or commercial space
- Unusual insurance such as co-insurance
- Deed restrictions or flip taxes
Almost all of these are considered by portfolio programs. The main exception is pending litigation involving structural or construction issues. Litigation for other reasons is reviewed case by case, usually at a reduced LTV.
Typical program terms
- Loan amounts up to $5,000,000, subject to LTV limits
- Up to 80% LTV on primary and second homes; 75% on investment properties and condotels
- Unlimited cash-out available, with no seasoning, on many programs
- Up to 10 financed properties and 15 owned on many programs
- One appraisal required regardless of loan amount; same-building comparables allowed
- Seller concessions up to 6% on many programs, including HOA dues
- No state restrictions on many co-op, condo, and condotel programs
Small units and studios
Standard guidelines often set a minimum unit size. Portfolio programs commonly consider units under 500 square feet and units without a full kitchen or separate bedroom, case by case and at lower LTVs.
Upfront building review
The best time to find out whether a building will work is before you're in contract. Many lenders will review the project certificate and the HOA master insurance policy up front, so we can tell you whether the building is financeable before you spend money on an appraisal.
Combining programs
Non-warrantable condo financing can often be paired with asset depletion, work visa, and foreign national programs.
See the full non-warrantable condo loan page.
Programs, rates, and terms are subject to change. This is not a commitment to lend.