When the Condo Doesn't Fit the Standard Box

A condo is considered "warrantable" when the building itself meets a set of standard guidelines that conventional lenders require: things like how many units are owner-occupied versus rented out, how much of the building is owned by a single investor, and whether the homeowners association is financially healthy. When a building doesn't meet those guidelines, it's called non-warrantable, and a standard conventional loan often can't be used on any unit inside it, no matter how strong the individual buyer is.

This trips up a lot of buyers who assume it's their own file that's the problem, when really it's the building. Common reasons a condo ends up non-warrantable include a high percentage of units being rented rather than owner-occupied, a large share of the building owned by one investor, ongoing litigation involving the HOA, or a new building that hasn't sold enough units yet.

Non-warrantable condos still get financed regularly, just through lenders who specifically underwrite this type of property. Terms and down payments are often a bit different than a standard condo purchase, which is exactly the kind of file worth shopping across our network rather than assuming it's a dead end.