Warrantable Vs. Non-Warrantable Condos

What's the difference and why is it important?

Warrantable and non-warrantable condos refer to the eligibility of a condominium project for financing through conventional mortgage lenders, such as Fannie Mae or Freddie Mac. The distinction between the two is based on a variety of criteria that lenders use to assess the risk associated with financing a particular condo project. Here's a brief explanation of each type:

Warrantable Condos

A warrantable condo is a condominium project that meets the guidelines set by Fannie Mae, Freddie Mac, or other conventional mortgage lenders. These guidelines are in place to minimize the risk for the lender when financing a condominium. Warrantable condos generally have:

  • A majority of owner-occupied units (typically over 50%).
  • A low percentage of units owned by a single individual or entity (no more than 10%).
  • A homeowners' association (HOA) with an adequate reserve fund and no pending litigation.
  • A low percentage of units that are delinquent on their HOA fees (usually less than 15%).
  • Proper insurance coverage in place for the entire condominium project.

Lenders consider warrantable condos to be a lower risk, and they are typically easier to finance. This means lower interest rates and more favorable loan terms for buyers.

Non-Warrantable Condos

A non-warrantable condo is a condominium project that does not meet the guidelines set by Fannie Mae, Freddie Mac, or other conventional mortgage lenders. Some common reasons a condo might be considered non-warrantable include:

  • A high percentage of non-owner-occupied units (e.g., vacation rentals, investment properties).
  • A single individual or entity owning a large percentage of units in the development.
  • The HOA not having sufficient reserve funds or facing ongoing litigation.
  • A high percentage of units delinquent on their HOA fees.
  • Inadequate insurance coverage for the condominium project.

Non-warrantable condos are considered higher risk by lenders, which can make it more difficult to obtain financing. Buyers may need to seek alternative financing options, such as portfolio loans or private money loans, which often come with higher interest rates and less favorable terms.


It's important for buyers to understand the difference between warrantable and non-warrantable condos when considering a purchase. Give us a call today so we can go over your options and help you find the right program for your needs.

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