Non-Warrantable Condos

A non-warrantable condo is any condo Fannie Mae, Freddie Mac, FHA, or VA won't finance. That doesn't mean it's a bad building — it just means the standard mortgage playbook doesn't apply. Florida has more of these buildings than any other state, and they can absolutely be financed with the right program.

What Makes a Condo "Warrantable"

"Warrantable" means the building and HOA meet the guidelines the major agencies (Fannie, Freddie, FHA, VA) use to approve financing. When one or more of those guidelines fails, the building becomes non-warrantable and agency loans are off the table.

The Most Common Reasons a Florida Condo Is Non-Warrantable

Too many rentals: more than 50% of units are non-owner-occupied (Fannie/Freddie), or under 50% owner-occupancy for FHA.
Single-entity ownership concentration: one person or LLC owns more than 10% of the units (20% for larger buildings).
Active or pending litigation: the HOA is a party to a lawsuit that could affect the association's financial health or the safety of the units.
Inadequate reserves: the association contributes less than 10% of its annual budget to reserves.
Master insurance gaps: insufficient hazard, flood, or fidelity coverage.
Commercial space: more than 35% of the building's square footage is commercial (rare exceptions exist).
Condotel character: daily/short-term rentals, front desk, rental program, or hotel-like amenities.
Structural or milestone issues: pending SIRS (Structural Integrity Reserve Study) findings or open milestone-inspection items under Florida's post-Surfside law.
Delinquencies: more than 15% of owners are 60+ days late on HOA dues.

Florida-specific: SIRS & milestone inspections

After the Champlain Towers collapse, Florida law requires milestone inspections at 30 years (25 in coastal counties) and Structural Integrity Reserve Studies. Buildings with open findings often become temporarily non-warrantable until repairs are funded and reserves are fully funded — this is one of the fastest-growing non-warrantable categories in Florida today.

How Financing Works on a Non-Warrantable Condo

When agency loans aren't available, portfolio and non-QM lenders step in. These are lenders who keep the loan on their own books rather than selling to Fannie or Freddie, which lets them write their own guidelines.

Typical terms

Down payment: 10%–25% depending on occupancy and condo condition
Credit score: usually 660+ on portfolio, 620+ on some non-QM
Rate: typically 0.5%–1.5% above a conforming rate
Loan sizes: often up to $3M+; jumbo non-warrantable is a specialty
Terms: 30-year fixed available, ARMs common
Property types: primary, second home, investment all financeable

The Condo Questionnaire — What Actually Gets Reviewed

Whether we're going agency or portfolio, the HOA or management company completes a condo questionnaire covering:

Owner-occupancy vs. investor ratio
Concentration of ownership by any single entity
Litigation status
Budget, reserves, and reserve study status
Master insurance policies (hazard, flood, wind, fidelity)
Special assessments — active or planned
HOA dues delinquency percentage
Rental restrictions and rental history
Amenities that suggest hotel-like operations

Common Questions

What makes a Florida condo non-warrantable?

Common reasons in Florida: too high a percentage of investor/rental units, a single owner controlling more than 10% of units, active or pending litigation involving the HOA, inadequate reserves, insufficient master insurance, hotel/short-term rental character (condotels), or ongoing structural or milestone-inspection issues.

Can I still get a mortgage on a non-warrantable condo?

Yes — through portfolio lenders and non-QM programs. Terms are typically 10–25% down, slightly higher rates than conventional, and shorter available terms in some cases. We regularly close non-warrantable condo loans across Florida.

Are condotels considered non-warrantable?

Yes. If the building operates like a hotel — front desk, daily rentals, on-site rental program, restaurants — Fannie, Freddie, FHA, and VA will not lend. Condotel-specific loan programs are required and are one of our specialties.

How do I find out if a specific condo is warrantable before I make an offer?

The HOA or management company completes a condo questionnaire. We can request a preliminary review before you go under contract so you know exactly which loan programs are on the table.

What to Do Next

Before you write an offer on a Florida condo — especially a coastal building over 25 years old, or anything with a rental program — call us. We'll review the questionnaire and financials in advance and tell you exactly which programs will close on it, at what rate and down payment, so there are no last-minute surprises.