Non-warrantable condo? There is often still a financing lane
On August 3, 2026, Fannie Mae and Freddie Mac retired their limited condo review for most attached projects, and buildings that passed for years started failing the new full exam. Our specialty lending partners still run a limited review: one 2-page questionnaire, low down payment options on primary homes, and no agency budget, reserve, or delinquency tests.
(No SSN or Credit Check Required for Estimate)
What does non-warrantable condo mean?
It means the building failed the exam, not you. Before Fannie Mae or Freddie Mac will back a loan in a condo project, they underwrite the project itself: the HOA budget, reserves, delinquencies, insurance, litigation, and commercial mix. A project that passes is warrantable. A project that fails any tested item is non-warrantable, and every conventional loan in the building fails with it.
Notice what is not on that list: you. Your credit, income, and down payment never enter a warrantability review. A borrower with an 800 score and 40% down gets the same no as everyone else, because the agencies decided about the building before your file was ever opened.
Non-warrantable does not mean unfinanceable. It means agency financing is off the table and the loan needs a different lane: non-QM condo programs (non-QM is industry shorthand for loans written outside the agency rulebook), available through the specialty wholesale lenders we work with, that review the project a different way.
Why did so many condo buildings just lose agency financing?
On August 3, 2026, Fannie Mae (Lender Letter LL-2026-03) and Freddie Mac (Bulletin 2026-C) retired the limited, streamlined condo review for attached projects with more than 10 units. Every agency condo loan in those projects now requires a Full Review: the 8-page Form 1076 questionnaire with the post-Surfside addendum, plus the HOA budget, reserve documentation, insurance certificates, and litigation detail. Small-project waivers and detached site condos are the main carve-outs. The underlying rules live in Fannie Mae's Selling Guide project standards and Freddie Mac's Guide Chapter 5701.
The second date to know is January 4, 2027, when the agency minimum reserve allocation rises from 10% to 15% of assessment income. Older HOAs that kept dues low with 4% to 6% reserve lines became non-warrantable pool-wide on August 3, and the pool widens again in January. Nothing about these buildings changed physically. A paperwork bar moved, and a lot of good projects are now on the wrong side of it.
What makes a condo building fail agency review?
Each item below is a standalone dealbreaker in an agency full review. One is enough; the agencies do not weigh the whole picture.
- Owner delinquencies: over 15% of units 60+ days behind on dues or a special assessment
- Reserve line under 10% of dues income (15% from January 2027), no current reserve study
- HOA business income over 10% of budget: cell towers, paid parking, commercial leases
- Commercial space over 35% of the project
- Insurance: a per-unit deductible over $50,000, or missing fidelity coverage
- HOA loans taken out to fund improvements
- Litigation beyond narrow limits
- Deferred maintenance, unfunded critical repairs, or a recent non-gut conversion
- Deed and resale restrictions outside agency rules
If your building failed on a financial or paperwork item above, keep reading. If it failed for structural safety reasons, skip ahead to the section on which buildings this program does not help, because we will be straight with you there.
Same building, two very different reviews
Guidelines vary by lender and are current as of September 2026. Typical comparison:
| Agency full review | The limited-review alternative | |
|---|---|---|
| Project questionnaire | 8-page Form 1076 plus addendum | One 2-page form |
| HOA budget and reserves | Reviewed; 10% reserve minimum, 15% in 2027 | Not reviewed |
| Delinquency test | Fails over 15% of units behind | Not asked |
| Insurance questionnaire | Required; $50,000 per-unit deductible cap | Lighter review: we still collect the insurance certificate, just an easier review |
| Commercial space | Up to 35% of the project | Up to 50% |
| Litigation damages | Up to 10% of reserves | Up to 25%, or an insurer defense letter |
The alternative is not automatically the right answer. If a building can pass agency review, a conventional loan usually wins on price, and we check that lane first. This program is for buildings where the agency lane is closed. Programs, rates, and terms are subject to change without notice; this is not a commitment to lend, and all loans are subject to credit approval and program guidelines.
The 2-page review: one short form instead of a full document package
Our specialty lending partners still run a limited project review: one 2-page condo questionnaire. No HOA budget review. No reserve study. No delinquency count. A lighter insurance review (we still collect the certificate, it is just an easier review). No inspection-history battery. The questions the agencies use to fail a building simply are not on the form.
The calendar changes with the paperwork. Property managers routinely charge $300+ and take weeks to assemble a full-review document package. The 2-page form typically comes back quicker than a full review, which matters when you are writing offers with a financing deadline attached.
What are the terms on a non-warrantable condo loan?
Typical terms through the portfolio and non-QM lenders we work with. Varies by lender and profile:
- As little as 15% down on primary homes
- 20% to 25% down on second homes and investment properties
- Second home and investment loan-to-value (LTV) limits vary by scenario, with lower caps in Florida
- Commercial space allowed up to 50% of the project
- Litigation damages up to 25% of reserves, or an insurer defense letter
- Investor-heavy buildings fine; no minimum owner-occupancy ratio required of the project on investment loans
- Mandatory amenity or club fees reviewed case-by-case
- Established projects roughly 90% sold and closed; new projects 75% pre-sold
- Project or legal phase must be 100% complete
Programs, rates, and terms are subject to change without notice. This is not a commitment to lend. All loans are subject to credit approval and program guidelines.
Which buildings does this program not help?
Condotels and hotel-operated projects, timeshares and fractional ownership, assisted living facilities, and mobile home projects are ineligible here, just as they are at the agencies. Serious or structural litigation is a no everywhere too. If a project fails on one of those, the answer is not a different lender; it is a different building.
The same goes for genuinely unsafe buildings. A project with real structural or safety deferred maintenance is not financeable anywhere, including through us, and we will not coach anyone around that. This program exists for buildings that fail agency review on paperwork and financial line items, not for buildings that fail on safety.
How does the process work?
Four steps, and the first one costs you nothing.
- 1Send us the address. A quick check usually tells us which lane the building is in.
- 2We price the file across our specialty partners and show you the terms.
- 3The HOA gets one 2-page form, which typically comes back quicker than a full review.
- 4Standard underwrite and close, with the project question already settled.
Who is a non-warrantable condo loan for?
If any of these sounds like you, the fix starts with the building, not your file.
Start with the address
Buying the condo as a rental? The building review and the borrower review are separate questions, and we can help with both. This program handles the building, while DSCR rental loans qualify you on the rent instead of your tax returns and an investment property HELOC can cover the down payment from equity you already have.
If you are eyeing a unit, or you already heard a no from a bank, send us the condo address and we will run the quick check, usually the same day. Ready for numbers? Start with a custom rate quote, with no SSN and no credit check required to see your options.
Non-warrantable condo loan FAQs
What is a non-warrantable condo?
A unit in a project that fails Fannie Mae or Freddie Mac project review, which makes conventional financing unavailable building-wide. The review looks at the HOA budget, reserves, delinquencies, insurance, litigation, and commercial mix, never at you.
What changed on August 3, 2026?
The agencies retired the limited condo review for attached projects with more than 10 units. Every agency condo loan in those projects now requires a full project exam, so buildings that passed for years began failing on items nobody used to check.
How do I find out if a condo building is warrantable?
Give us the address before you write the offer. With a quick check we can usually do some research to see why the building did not get financing in the past and whether our limited review allows for financing.
Can I still buy in a non-warrantable building?
Often, yes. Non-QM programs through our specialty lending partners review the project with one 2-page questionnaire and skip the agency budget, reserve, and delinquency tests. Condotels, timeshares, and unsafe buildings remain ineligible.
Are non-warrantable condo loans more expensive than conventional?
Typically, yes. Non-QM pricing is generally higher than agency pricing, which is why we check the agency lane first. If a building can pass full review, conventional usually wins, and we will tell you so.
Can investors use this program?
Yes. Investor-heavy buildings are fine, and investment loans here carry no minimum owner-occupancy ratio requirement for the project (you still certify your own occupancy on every application). Many investors pair the purchase with DSCR qualifying, which uses the rent instead of tax returns.
My building fails the reserve test. Does that mean it is unsafe?
Usually not. A thin reserve line is a budgeting choice, often an HOA keeping dues low, and it is exactly the kind of paperwork failure this program absorbs. Real structural or safety problems are different: those buildings are not financeable anywhere.
What does my HOA have to provide?
One 2-page questionnaire, typically quicker than a full review. No budget package and no reserve study. We still collect the standard insurance certificate, it is just an easier review.