Non-warrantable condos

A condo is non-warrantable when the building doesn't meet Fannie Mae and Freddie Mac's project rules. The unit can be perfectly fine; the building is the issue.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

Common causes

• The HOA is in active litigation
• A single entity owns a large share of units
• Too many units are rented out or the project is new and unsold
• Significant commercial space
• Thin reserves or high HOA delinquencies

HELOCs on non-warrantable condos

Some HELOC lenders apply their own lighter condo standards, so a non-warrantable building doesn't always rule out a HELOC. HELOCs on condos.

These are the situations where shopping more than 180 lenders matters most: one lender's "no" is often another's standard loan. Tell us about your situation.

An example

A buyer wants a unit in a 60-unit building where the HOA is suing the builder over water intrusion. Most conventional lenders decline because of the litigation. A non-QM lender approves with 20% down at a rate about a point higher than a conventional loan, after reviewing the lawsuit's scope and the HOA's reserves. Once the litigation resolves, the owner may be able to refinance into a conventional loan.

How to find out before you buy

• Ask the listing agent for the HOA's budget, reserve study, insurance summary and any litigation disclosures.
• Ask what percentage of units are owner-occupied and whether any entity owns more than a few units.
• Have your loan officer run a condo project review early, before your inspection period ends.

If you already own one

Some HELOC lenders review the building less strictly than mortgage lenders, especially for smaller lines. If yours is non-warrantable because of a temporary issue such as a lawsuit or low reserves, a smaller line from a lender with flexible condo rules may still be possible. HELOCs on condos.

Mistakes to avoid

• Waiting until after the inspection period to check financing.
• Assuming an FHA approval means conventional approval.
• Ignoring special assessments tied to the building's issues.

Documents lenders review

• HOA questionnaire and budget.
• Litigation details, if any.
• Master insurance policy.
• Owner-occupancy and investor concentration figures.

Is my condo warrantable? A quick checklist

Fannie Mae and Freddie Mac review the building, not you. Check anything you know or suspect is true of your building. One check is often enough to make it non-warrantable for a conventional loan.

Agency rules change; Florida's post-Surfside inspection and reserve laws have pushed many buildings onto do-not-lend lists while repairs are completed. A lender confirms with a condo questionnaire from the association.

Also asked

How do I know if my condo is non-warrantable?

Ask a loan officer to run a project review, or ask the HOA whether recent buyers used conventional financing. A building with litigation, high investor ownership or low reserves is a common sign.

Can I refinance a non-warrantable condo into a conventional loan later?

Yes, once the building's issue is resolved, such as when litigation ends or reserves are rebuilt, a non-warrantable condo can qualify for a conventional refinance.

Are non-warrantable condos harder to sell?

Somewhat, because fewer buyers can use conventional financing. Price and the building's issues matter most.

Do non-warrantable condos have higher HOA dues?

Not necessarily, but buildings with low reserves often face future special assessments, which lenders and buyers watch.

Can FHA or VA lend on a non-warrantable condo?

Sometimes. FHA allows single-unit approvals in some buildings that aren't on its approved list, but VA requires the condo project to be on its own list. Both keep approval lists separate from Fannie Mae and Freddie Mac.

Is the rate much higher on a non-warrantable condo loan?

Usually, yes. A non-warrantable condo loan typically costs somewhat more, often half a point to a point or more in rate, and requires a larger down payment.

Are HELOCs easier than mortgages on non-warrantable condos?

Sometimes. Many HELOC lenders do a lighter condo review, especially for smaller lines, and some don't require the project to meet Fannie Mae standards at all. But building issues like litigation or low insurance coverage can still lead to a decline. If one HELOC lender says no, ask another; their condo rules vary much more than mortgage rules do.

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