Non-Warrantable Condos
The building broke a rule. You didn’t.
Fannie and Freddie approve condo buildings against a checklist — investor percentages, reserve budgets, pending lawsuits, commercial square footage. Half of Miami’s most interesting towers fail at least one line, which makes every unit inside “non-warrantable” and every conventional pre-approval worthless. The building’s problem is fixable. It just is not fixable at your bank.
Who this is built for
Buyers in new towers
Presale thresholds make almost every new building non-warrantable in its first years. The unit is fine; the sales office arithmetic is the issue.
Buyers in investor-heavy buildings
When too many units are rentals or one entity owns too many doors, the checklist fails — common in exactly the buildings investors like.
Anyone whose building has a lawsuit
Construction-defect and HOA litigation flags the project no matter how strong you are. Some of it is financeable anyway — the nature of the suit decides.
Owners told “the budget killed it”
A reserve line under ten percent of assessments fails the agency test. Some lenders read the balance sheet instead of the line item.
Have a building in mind? Send me the address before you write an offer — the questionnaire decides more here than your file does, and that answer takes one call.
Check a buildingThe checklist is about the building. Your file is judged separately
Your credit did not fail. A reserve percentage did — or a lawsuit, or an investor count. The building broke the rule, not you.
Non-warrantable is a spectrum, not a wall — and the reasons matter more than the label:
And the boundary worth knowing: a building that is actually operated as a hotel — front desk, nightly stays, rental program — is not a non-warrantable condo. It is a condotel, with its own page and its own shelf.
| It’s the building, not you | The checklist never asks about the borrower | Your credit, income and reserves are underwritten separately — and normally. The project review runs in parallel. |
| The reason decides the door | Litigation ≠ presale ≠ reserves | A new tower short of its presale number is an easy story. A structural-defect lawsuit is a hard no almost everywhere. Everything else sits between. |
| Florida costs extra here too | Five points at several programs | The same statewide haircut as the condotel shelf, plus full condo review above 70% at one family. Build it into the offer. |
Program availability and geographic adjustments vary by lender and change without notice. Not all buildings or applicants will qualify.
How it actually works
Warrantability is a verdict on the building. The financing routes around the verdict.
The questionnaire decides first
The HOA answers a standard form — ownership concentration, reserves, litigation, commercial space, rental counts. One failing answer reclassifies every unit in the tower.
Conventional financing exits
Agency programs cannot waive the checklist. The decline arrives late — often after the appraisal — and it is automatic, not personal.
The non-QM shelf underwrites the actual risk
These programs read the same questionnaire and price what they see: a few points of leverage for the building’s quirk, instead of a refusal.
Your side of the file stays normal
Full doc, bank statements, or the rent itself on investor routes — every documentation family on this site applies here too.
The two routes
Two programs, two ways the same building gets financed — pick the one that matches what you will do with the unit:
One program’s current owner-occupied matrix takes non-warrantable collateral within a few points of a regular condo:
| Purpose | Maximum loan-to-value | Condition |
|---|---|---|
| Purchase | 85% | Owner-occupied, full or alt documentation |
| Cash-out refinance | 80% | The highest non-warrantable cash-out on my shelf |
Eighty-five percent on a building your bank refused to look at is the point of this page. A companion program from the same family corroborates at 80/75 — with two catches worth knowing before you pick a route: it trims five points in Florida, and on non-warrantable collateral it will not take WVOE, 1099-only or P&L-only documentation. Full doc and bank statements travel everywhere; the lighter documents are pickier about the building under them.
Representative of one program family’s matrices: the owner-occupied program effective 06/09/2026, and its companion effective 07/27/2026 for the corroborating figures and documentation restriction. Maximum loan-to-value, credit score, occupancy and loan amount are separate limits shown only in combinations that appear in the source documents. Project approval is a separate underwriting. Not all applicants or properties will qualify.
A separate investor program publishes its non-warrantable caps directly. As printed:
| Purpose | Maximum loan-to-value | Condition |
|---|---|---|
| Purchase | 80% | Minimum coverage ratio 1.00 |
| Rate-and-term refinance | 75% | Same coverage floor |
| Cash-out refinance | 75% | Same coverage floor |
Florida subtracts five from each figure, in that program’s own arithmetic. The corroboration runs deep on this one: a third program’s investor matrix carries the same 80/75 shape with the same Florida five — and holds it even for borrowers two years past a bankruptcy, where its credit-event cap simply takes over if lower. A fourth family applies the identical minus-five and requires full condo review above 70% in this state. And a fifth program takes non-warrantable projects in its income-documented program with credit-committee sign-off — the slow road, but one that ends in a primary residence at full documentation. One route is missing from everything above, and it is the one people ask for most: every grid on this page replaces your first mortgage. If the first mortgage is worth keeping — and on a condo bought before rates moved it usually is — there is a closed-end second that takes non-warrantable collateral to seventy-five percent of combined value and leaves the first loan exactly where it is.† The second-mortgage page covers how those work.
Representative of a separate program’s summary version 08/17/2026; corroborating figures from another program’s matrix effective 07/20/2026, one program family’s matrices revisions 02/09/2026–06/16/2026, and a further program’s guidelines revision 06/01/2026, each cited to its own document. Figures from different programs never combine. Coverage-ratio programs are business-purpose loans on investment property. Not all applicants or properties will qualify.
Building run like a hotel instead? That is the condotel page →
† From a separate program’s published caps effective 07/27/2026: a closed-end second mortgage on non-warrantable collateral, to 75% of combined value — the two liens added together and measured against the property. Loans from $75,000 to $1,000,000, cash-out or rate-and-term. That program does not lend on a primary residence or a second home in New York, and excludes second homes and investment property in Texas; Baltimore City, Philadelphia and Hawaii lava zones are out everywhere. A second mortgage is its own loan with its own terms and its own closing. Figures from different programs never combine.
The checklist, decoded — what actually breaks a building
What to gather before we talk
The condo questionnaire
The standard form, answered by the HOA or management company. It is the single document that decides which shelf the building sits on.
The budget and the balance sheet
The reserve percentage lives in the budget; the cash position that can rescue a thin reserve lives in the balance sheet. Underwriters want both, so bring both.
Anything about the lawsuit
The complaint or the HOA’s litigation summary. The nature of the suit — cosmetic, financial, structural — moves the file more than its existence.
The milestone inspection report, if the building has had one
The first-phase report, and the second-phase one if it was issued. If a second phase exists, bring whatever the association has on the repair plan and how it is being paid for — that is the question every underwriter asks next.
The structural integrity reserve study
And the current funding plan beside it. The study says what the building needs; the budget says whether it is being funded. Underwriters read the pair, not either alone.
Any special assessment — levied, pending or still being discussed
Amount, purpose, term, and whether it has actually been voted. A pending assessment is not automatically fatal, but finding out about it in underwriting is much worse than telling me now.
Your normal income file
Whatever documentation family fits you: full doc, bank statements, or the property’s rent on investor routes.
Want the exact list for your file before you ever apply? Build your document checklist — the list changes with your answers, printable and yours to keep.
Where it wins — and the honest limits
Told straight, because this page is useless otherwise.
The warrantability checklist never asks about the borrower. Your credit, income and reserves are underwritten separately, and normally, while the project review runs alongside.
Buildings fail for very different reasons, and the reason matters far more than the label. Some of what gets a tower labelled non-warrantable barely moves the terms.
One program’s guide accepts reserve funding below the usual line when the association holds real cash against the year’s assessments — a rescue that lives in the balance sheet, not the budget.
Live in it or rent it out: there is a printed route for each, so the label does not decide what you are allowed to do with the unit.
A defect suit about the building’s bones is the one reason on the checklist that resists every workaround. If that is the situation, the honest advice is usually a different building.
At one program, WVOE, 1099-only and P&L-only files cannot take non-warrantable collateral. If your income documents lightly and the building reads hard, one of the two has to give.
Several programs trim the state before they trim the building. Stack the two haircuts in your offer math from the start.
Same line as every page in this family: the quirk costs something. What it buys is a closing in a building the checklist rejected.
Send me the questionnaire before you write the offer
Forward the listing and the condo questionnaire if you have it — I will tell you whether the building reads warrantable, non-warrantable or condotel, and which doors are open at what leverage, before you spend a dollar. The building review is free; discovering it in week three is not.
Questions people actually ask
Open the full Q&A — the questionnaire, the reserves, and the fine points ▾
+What exactly makes a condo “non-warrantable”?
A failed line on the agency checklist for the building: too few units sold in a new project, one owner holding more than 30% of the doors, commercial space over 40% of the square footage, reserves funded under 10%, active litigation, or hotel-style operation. Your unit can be perfect; the label attaches to the whole project.
+Is my new-construction tower non-warrantable forever?
Almost never. New projects typically clear the checklist as sales close and owners move in — 40% sold-and-conveyed with 40% owner occupancy is one program’s bar for a clean new-project review. Buildings usually graduate; early buyers just cannot wait for it.
+The building has a lawsuit. Is financing dead?
It depends entirely on the suit. One program takes pending litigation case-by-case but refuses anything structural or health-and-safety that affects marketability. A dispute over cable contracts is financeable; cracked post-tension cables are not. Send me the complaint before you assume either way.
+Can I still buy it as my primary residence?
Yes — the owner-occupied route above reaches 85% on purchase, and a separate program will take non-warrantable projects at full documentation with committee approval. Non-warrantable does not mean investors-only; it means agency-ineligible.
+Why did my program only discover this at the appraisal?
Because the questionnaire usually comes back around the same time. Conventional files order project review late, and the decline is automatic once a checklist line fails. Starting on this shelf runs the building review first — before you have spent money on the rest.
+What is the difference between this and a condotel?
Operation. A non-warrantable condo is a residential building that failed a paperwork test; a condotel is a building run like a hotel — front desk, nightly stays, rental program. The condotel shelf is smaller and its own page covers it.
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Loan programs, explained honestly
Programs described are offered through third-party lenders, are subject to lender approval, full underwriting and project-level review, and change without notice. Leverage caps, credit minimums, occupancy restrictions, coverage-ratio floors, documentation restrictions, geographic adjustments and loan amounts are separate limits, vary by lender and program, and are never available in combination across programs. Figures reflect five different programs’ current materials, each cited beside the table or section it supports. Project eligibility is determined per building and is not guaranteed by any statement on this page. Not all applicants or properties will qualify. This is not a commitment to lend. Equal Housing Opportunity.