Non-Warrantable Vs. Warrantable Condos: Rules and How to Finance Them

Written by Meghan Howard Taylor

Before you get your heart set on one particular condo, do you know if it’s classified as Warrantable or Non-Warrantable? We’ve got all of your questions answered below!

What are Warrantable and Non-Warrantable condos?

To be classified as a Warrantable condo, 51% or more of the condo owners need to
live in the condo complex. A condo project that is considered Non-Warrantable is a
complex that has over 51% of the units as rentals.

How are condo loans different than regular home loans?

Condominium loans are stricter than single family home mortgage loans because
not only does the condo unit buyer needs to qualify for a condo loan but the condominium
complex also needs to qualify
• The condo complex needs to meet the lender’s lending guidelines and standards
• Condominiums are viewed riskier to mortgage lenders
Lenders have higher credit standards apply for condominium mortgage loans.

How can I find out whether a condo is Warrantable or Non-Warrantable?

The mortgage loan originator should provide the buyer with a condominium
questionnaire to have the condo homeowners association manager to complete
and sign
• The mortgage loan originator should get clearance from the mortgage underwriter
whether the condominium complex is a Warrantable condo
• If it is not, then condominium cannot be done as a conventional loan and needs to
find a Non-Warrantable condo mortgage lender
• Fannie Mae and Freddie Mac will not purchase condominium mortgage loans that
are Non-Warrantable condo projects. The only way you will get financing on a
Non-Warrantable condo unit is through a portfolio lender.

Here are the qualifications for Warrantable condo mortgage loans:

• Minimum 20% down payment
• Minimum credit score of 680
• Minimum loan size of $100,000

Here are the qualifications for Non-Warrantable condominiums: 

• Condo with 500 square feet, has one bedroom, and has a functional kitchen
• 30-year loan program, adjustable mortgage rate loans only (3/1 ARM, 5/1 ARM,
7/1 ARM)
• Maximum 40% debt to income ratio and one year reserves for both the primary
property (if the condo is a second home or vacation home) and the new
Non-Warrantable condo unit.


If you have any questions, contact your local mortgage lender today!

To be classified as a Warrantable condo, 51% or more of the condo owners need to live in the condo complex.

Down payment requirements, closing costs, and loan amounts are for illustrative purposes only; subject to credit qualification, not all applicants may qualify. Not a commitment to lend. Not affiliated with or endorsed by any government institution. Please contact us for an exact quote and for more information on fees and terms.

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