Warrantable vs. Non-Warrantable Condos

Mortgage Tips

 

Lending options are somewhat narrow for prospective condo buyers. Knowing the qualifications standards upfront can go a long way toward avoiding headaches.

 

Condo properties that DO qualify for residential mortgage loans through Fannie Mae or Freddie Mac

WARRANTABLE

  • No single entity owns more than 10% of the units (including the developer.)
  • At least 51% of the units are owner-occupied
  • Fewer than 15% of the units are in arrears with their association dues
  • The homeowners association (HOA) is not named in any lawsuits
  • Commercial space accounts for 25% or less of the total building square footage

NON-WARRANTABLE

 

Condo properties that DO NOT qualify for residential mortgage loans through Fannie Mae or Freddie Mac

 

  • The project has yet to be completed
  • Its developer has not turned over control of the HOA to the owners
  • The community allows short-term rentals
  • A single person or entity owns more than 10% of all units
  • It’s in a project where the majority of units are rented to non-owners