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What is a non-warrantable condo?
A non-warrantable condo is a condominium unit in a project that doesn't meet the eligibility requirements Fannie Mae or Freddie Mac set for conventional financing. The issue is with the project, not the borrower. Lenders that finance non-warrantable condos apply their own project review standards, often through non-QM or portfolio programs.
Common reasons a project is non-warrantable include one entity owning too many units, a large share of commercial space, pending litigation, an underfunded HOA budget, or hotel-style operations. The full list comes from the agency guides.
For brokers, the first signal is often the condo questionnaire. A borrower with strong credit and income can still be declined conventionally because of the building.
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