Non-Warrantable Condos

A non-warrantable condo is a condominium property in which the loan is not eligible to be sold to Freddie Mac or Fannie Mae, and as such, mortgage financing for this type of property is considered by most banks to be more “risky.” Freddie Mac and Fannie Mae would consider a condo to be “non-warrantable” if, for instance, the condo:

  • Is in a development which has yet to be completed
  • Is in a development which allows for short-term rentals
  • Is in a development where one person or entity owns more than 10% of all units
  • Is in a development where less than 50% of the occupants in a complex are the owners
  • Is in a development involved in litigation of any kind regardless of whether the building is suing another party, or is the party being sued.

Typically, a condo is considered warrantable if, for instance:

  • No single entity owns more than 10% of the units in a project, including the developer
  • At least 51% of the units are owner-occupied
  • Fewer than 15% of the units are in arrears with their association dues
  • There is no litigation in which the homeowner’s association (HOA) is named
  • Commercial space account for 25 percent or less of the total building square footage
  • Mortgage Loan Solution for Non-Warrantable Condo Borrowers and Self-Employed Borrowers

4 years seasoning for foreclosure, short sale, bankruptcy or deed-in-lieu
Loans up to $3 million (minimum $150,000)
Credit scores starting at 660
Up to 90% LTV/CLTV
Owner-occupied and second homes
Non-warrantable condos
Interest-only available
Cash-out available – $500,000 maximum
Full doc and bank statements available
Option to qualify with assets instead of income
1-year tax return program available

  • Hard Equity Loans

Only if you have applied for a Conventional loan and your loan has been denied, or you can’t get any other type of mortgage loan, then this type of loan may be attractive.  These are the “no questions asked” loans for investment properties. It does not matter if you don’t have a social security number, or if you have an open foreclosure, short sale or bankruptcy, or if you can’t show tax returns or pay stubs. The only thing that matter is the loan to value – cannot exceed 70%.

You will have to pay a high-interest until you can qualify to refinance or you sell the property. If some of the above hold true to you, you have 30% to put down, and you are willing to take a two-to-five-year loan with a high interest, then this is the loan is for you.