Non-Warrantable Condo
What is a non-warrantable condo?
A condominium project that doesn’t meet Fannie Mae or Freddie Mac warrantability criteria — financeable by non-QM investor lenders.
“Warrantability” is mortgage shorthand for a condominium project that meets Fannie Mae and Freddie Mac (the government-sponsored entities, or GSEs) guidelines. The GSEs purchase the vast majority of conventional U.S. mortgages, so any condo a conventional bank will lend on must pass their condo-project review.
A non-warrantable condo fails one or more of these tests. The most common triggers are:
- Investor concentration > 50% — more than half the units are non-owner-occupied
- Commercial space > 25% of total building area
- Single-entity ownership > 10% — one party owns more than 10% of the units
- Pending HOA litigation — the association is in active lawsuit
- Inadequate HOA reserves or undisclosed special assessments
- Short-term / transient rental operations
A perfectly nice building with healthy financials and great management can still be non-warrantable simply because most of the owners are investors. That doesn’t make it a bad investment — it just means a different lender is needed.
How non-warrantable condos apply at Total Quality Lending
Total Quality Lending’s DSCR program is built for investor lending and explicitly accepts non-warrantable condos. TQL maintains its own condo overlay (not Fannie’s) that allows:
- High investor-ratio buildings
- Mixed-use buildings with significant commercial space
- Single-entity ownership above conventional thresholds
- Buildings with active short-term rental programs
TQL’s in-house Condo-Doc Department guarantees a 7-day review for a flat borrower fee. Required documents include the HOA budget, master insurance certificate, project questionnaire, and (for new construction) the public offering statement. Condotels are a specific subset of non-warrantable condos handled under their own LTV grid.