What is a Non-Warrantable Condo?
- The larger condo project is not yet complete.
- The condo development allows short-term rental units and/or the majority of units in the condo project may be rentals.
- The condo project’s developer is still in control of the owner’s association.
- A single person or entity owns more than 10% of all condo units in the building or development.
- Units in developments where more than 25% of the space is used commercially.
- The condo project is involved in litigation of any kind.
- The budget reserve is less than 10%
Non-warrantable condominiums may be challenging to finance, but it’s certainly not impossible.
Typically, a condo is considered warrantable if:
- 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 homeowners association (HOA) is named
- Commercial space accounts is 25 percent or less of the total building square footage
- The Budget has 10% Reserved amount