What Makes a Condo Non-Warrantable?
A non-warrantable condo fails to meet Fannie Mae, Freddie Mac, or FHA project approval standards — making it ineligible for conventional or government-backed financing. Common reasons include: more than 50% of units are investor-owned (not owner-occupied), the HOA is involved in active litigation, a single entity owns more than 20% of the units, more than 25% of the building is commercial space, the project is a condotel or hotel-condo with rental management programs, the building is newly constructed with less than 70% of units sold, or the HOA has insufficient reserves or delinquent dues above 15%.
California's condo market has a high percentage of non-warrantable projects, especially in urban high-rises, mixed-use developments, and resort communities. Financing options include portfolio loans from banks that hold loans on their own books, Non-QM programs specifically designed for non-warrantable condos, and DSCR programs for investor-owned units. Down payments are typically 20-30%, and rates run 0.5-1.5% above warrantable condo rates. A thorough HOA questionnaire review is required before any lender will proceed.
Non-Warrantable Condo Loan Requirements
A non-warrantable condo loan is a portfolio product for units in projects that Fannie Mae and Freddie Mac will not accept. Because the loan cannot be sold to the agencies, the lender holds it on its own balance sheet and sets its own guidelines.
Typical requirements are 20% to 25% down for a primary residence and 25% to 30% for an investment property, with credit scores starting around 680 and several months of reserves. Rates generally run 0.5% to 1.5% above a conventional condo loan, reflecting the fact that the lender keeps the risk.
Underwriting focuses as much on the project as on the borrower. Lenders review the HOA budget, reserve funding, litigation status, delinquency rate, and the share of units held by investors.
Why Condos Become Non-Warrantable in California
Several conditions push a project outside agency guidelines. A single owner or entity controlling too large a share of the units is a common trigger, as is a high concentration of investor-owned units when the buyer intends to occupy.
Ongoing HOA litigation — very common in California over construction defects — will make a project non-warrantable regardless of its other qualities. So will inadequate reserve funding, more than 15% of owners delinquent on dues, or a significant portion of the building given over to commercial space.
Newly built projects still in developer control, condotels with short-term rental programs, and live-work or mixed-use buildings frequently fall into this category too. In dense California markets these characteristics are widespread, which is why non-warrantable financing is a routine need rather than an exotic one.
Non-Warrantable Condo Loan Rates and Costs
Because these loans stay on a lender balance sheet, pricing varies more than in the agency market. Rates commonly land 0.5% to 1.5% above a comparable warrantable condo loan, and some lenders add points instead of raising the rate.
The trade-off is access: for many California buyers, a non-warrantable program is the only route to owning a specific unit, and the loan can often be refinanced into conventional terms later if the project resolves its litigation or improves its reserves.
Frequently Asked Questions — Non-Warrantable Condo Loans
What is a non-warrantable condo loan?
A non-warrantable condo loan finances a unit in a project Fannie Mae and Freddie Mac will not accept, so the lender holds it on its own balance sheet. Projects commonly fail warrantability for HOA litigation — very common in California over construction defects — high investor concentration, single-owner control, or inadequate reserves. Expect 20-30% down, a 680 credit score, and a rate 0.5% to 1.5% above a warrantable condo loan.
What credit score do I need for non-warrantable condo loans?
Most non-warrantable condo loan programs in California look for 680+. Credit tends to affect your pricing more than your eligibility — a stronger score usually shows up as a lower rate rather than a different answer on whether you qualify.
How much down payment do I need?
A non-warrantable condo loan in California typically requires 20-30% down. The exact figure moves with your credit profile, occupancy and property type — stronger files land at the low end of that range.
How long does closing take?
A non-warrantable condo loan in California generally closes in 30-50 days. Appraisal turn times and how quickly you return requested documents are the two things that move that timeline most.
Can I use this program for an investment property?
A non-warrantable condo loan is available for primary, second home or investment. Occupancy affects both pricing and down payment, so confirm the intended use up front — it changes the terms you are quoted.
Are rates higher for non-warrantable condo loans?
Non-warrantable condo loan rates run roughly 1% to 2% above a comparable conventional loan, which is the cost of documenting income a different way. Your specific number depends on credit, down payment, occupancy and the day you lock.
Do I need to verify my income?
For a non-warrantable condo loan, income is full documentation, with heavier scrutiny of the HOA than the borrower. This is the main way the program differs from a standard conventional loan, and it is usually the reason borrowers choose it.
Can I refinance later into a different program?
Yes. With a non-warrantable condo loan the usual path is to refinance conventionally if the project later becomes warrantable. Nothing locks you in — plan the exit when you take the loan rather than after.
What documents do I need to apply?
For a non-warrantable condo loan you will need a government ID, credit authorization and property details, plus the HOA budget, reserve study, litigation disclosure and owner-occupancy breakdown.
How do I get started?
Call (888) 703-1840 for a free non-warrantable condo loan consultation, or use the form on this page. Pre-approval usually takes 1-3 business days, and there is no cost and no hard credit pull to find out what you qualify for.
Related Loan Programs
Non-Warrantable Condo Loan Requirements
A non-warrantable condo loan is a portfolio product for units in projects that Fannie Mae and Freddie Mac will not accept. Because the loan cannot be sold to the agencies, the lender holds it on its own balance sheet and sets its own guidelines.
Typical requirements are 20% to 25% down for a primary residence and 25% to 30% for an investment property, with credit scores starting around 680 and several months of reserves. Rates generally run 0.5% to 1.5% above a conventional condo loan, reflecting the fact that the lender keeps the risk.
Underwriting focuses as much on the project as on the borrower. Lenders review the HOA budget, reserve funding, litigation status, delinquency rate, and the share of units held by investors.
Why Condos Become Non-Warrantable in California
Several conditions push a project outside agency guidelines. A single owner or entity controlling too large a share of the units is a common trigger, as is a high concentration of investor-owned units when the buyer intends to occupy.
Ongoing HOA litigation — very common in California over construction defects — will make a project non-warrantable regardless of its other qualities. So will inadequate reserve funding, more than 15% of owners delinquent on dues, or a significant portion of the building given over to commercial space.
Newly built projects still in developer control, condotels with short-term rental programs, and live-work or mixed-use buildings frequently fall into this category too. In dense California markets these characteristics are widespread, which is why non-warrantable financing is a routine need rather than an exotic one.
Non-Warrantable Condo Loan Rates and Costs
Because these loans stay on a lender balance sheet, pricing varies more than in the agency market. Rates commonly land 0.5% to 1.5% above a comparable warrantable condo loan, and some lenders add points instead of raising the rate.
The trade-off is access: for many California buyers, a non-warrantable program is the only route to owning a specific unit, and the loan can often be refinanced into conventional terms later if the project resolves its litigation or improves its reserves.
What is a non-warrantable condo loan?
A non-warrantable condo loan finances a unit in a project Fannie Mae and Freddie Mac will not accept, so the lender holds it on its own balance sheet. Projects commonly fail warrantability for HOA litigation — very common in California over construction defects — high investor concentration, single-owner control, or inadequate reserves. Expect 20-30% down, a 680 credit score, and a rate 0.5% to 1.5% above a warrantable condo loan.
What credit score do I need for non-warrantable condo loans?
Most non-warrantable condo loan programs in California look for 680+. Credit tends to affect your pricing more than your eligibility — a stronger score usually shows up as a lower rate rather than a different answer on whether you qualify.
How much down payment do I need?
A non-warrantable condo loan in California typically requires 20-30% down. The exact figure moves with your credit profile, occupancy and property type — stronger files land at the low end of that range.
How long does closing take?
A non-warrantable condo loan in California generally closes in 30-50 days. Appraisal turn times and how quickly you return requested documents are the two things that move that timeline most.
Can I use this program for an investment property?
A non-warrantable condo loan is available for primary, second home or investment. Occupancy affects both pricing and down payment, so confirm the intended use up front — it changes the terms you are quoted.
Are rates higher for non-warrantable condo loans?
Non-warrantable condo loan rates run roughly 1% to 2% above a comparable conventional loan, which is the cost of documenting income a different way. Your specific number depends on credit, down payment, occupancy and the day you lock.
Do I need to verify my income?
For a non-warrantable condo loan, income is full documentation, with heavier scrutiny of the HOA than the borrower. This is the main way the program differs from a standard conventional loan, and it is usually the reason borrowers choose it.
Can I refinance later into a different program?
Yes. With a non-warrantable condo loan the usual path is to refinance conventionally if the project later becomes warrantable. Nothing locks you in — plan the exit when you take the loan rather than after.
What documents do I need to apply?
For a non-warrantable condo loan you will need a government ID, credit authorization and property details, plus the HOA budget, reserve study, litigation disclosure and owner-occupancy breakdown.
How do I get started?
Call (888) 703-1840 for a free non-warrantable condo loan consultation, or use the form on this page. Pre-approval usually takes 1-3 business days, and there is no cost and no hard credit pull to find out what you qualify for.
Standard condo financingNon-QM →
Alternative programsPortfolio Loans →
Bank-held financingInvestment Property →
Investor options
Last updated: July 2026. Sources: Federal Housing Finance Agency (FHFA), HUD, VA, CalHFA, CFPB, California DRE. All loans subject to credit approval. Rates subject to change. Mortgage Guide California is an educational publisher. Sponsored by Save Financial, Inc. (NMLS #377740). Equal Housing Lender.
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