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Condo Financing

Buyer Resources/Financing

Condo Financing

Warrantable vs. non-warrantable.

When you finance a condo, the lender approves the building as well as you. Whether a project is “warrantable” decides which loans you can use, how much you’ll put down and your rate, so it’s worth knowing early.

Two Kinds of Condos

Warrantable CondoMeets agency guidelines

  • Meets Fannie Mae or Freddie Mac standards, so it qualifies for conventional financing.
  • Loans: conventional, plus FHA or VA if the project is approved.
  • Down payment: as little as 3–5% conventional, 3.5% FHA, 0% VA.
  • Rates: standard market rates.
  • Buyer pool: broadest, and easiest to resell.
Non-Warrantable CondoOutside agency guidelines

  • Doesn’t meet one or more agency standards, so financing comes from portfolio or specialty lenders.
  • Loans: portfolio, non-QM or cash.
  • Down payment: typically 20–30%.
  • Rates: often about 1–2% higher than conventional.
  • Buyer pool: smaller, so plan ahead for resale.

What Can Make a Condo Non-Warrantable

Single-entity ownershipOne owner or investor holds more than 20% of units (more than 2 units in a 5–20 unit project).
Commercial spaceMore than 35% of the building is commercial or non-residential.
Hotel-style operationCondotels, rental desks, daily maid service or mandatory rental pools.
HOA delinquenciesMore than 15% of owners are 60+ days behind on dues.
Underfunded reservesLess than 10% of the budget goes to reserves, rising to 15% in January 2027.
LitigationThe HOA or developer is in a lawsuit, especially over safety or structural issues.
Critical repairsSignificant deferred maintenance or unsafe conditions not yet repaired.
New or incomplete projectsToo few units sold, phases still underway, or the developer still controls the HOA.

Thresholds shown are common Fannie Mae standards; FHA, VA and individual lenders may apply different or stricter rules.

How Each Loan Type Handles Condos

Loan Type Condo Requirements
Conventional The lender reviews the project against Fannie Mae or Freddie Mac standards using the HOA’s condo questionnaire, budget and insurance. Small projects (up to 10 units) may qualify for a waiver of project review.
FHA The project must be FHA-approved, or the unit may qualify through a single-unit approval. FHA generally requires at least 50% owner occupancy.
VA The project generally must be VA-approved; your lender can check the VA condo list.
Non-warrantable Portfolio and non-QM lenders set their own rules, often 20%+ down and credit scores around 680–700 or higher.

2026 Changes to Know

Limited review retiredSince August 3, 2026, conventional condo loans need a full project review or a waiver, so expect more HOA documents.
Higher reserve standardStarting January 4, 2027, HOAs must budget at least 15% for reserves, unless they follow a current reserve study.
Investor limit removedThe 50% investor-concentration limit no longer applies to conventional loans.
Insurance deductiblesMaster-policy deductibles above $50,000 per unit are ineligible, and owners need an HO-6 policy to cover gaps.

The Condo Questionnaire

What it is

Your lender sends a condo questionnaire, such as Fannie Mae Form 1076, to the HOA or management company, which completes it, often for a fee. Order it early in escrow; slow responses are a common cause of delays.

What it asks

Units sold, owner-occupied and rented; dues delinquencies and special assessments; reserves, budget and litigation; commercial space, rentals and master insurance.

Questions to Ask Before You Offer

  • Is the project FHA- or VA-approved, if I need those loans?
  • Has the lender confirmed the project is warrantable?
  • Are any special assessments planned or underway?
  • What do the dues cover: water, trash, insurance, amenities?
  • Are there rental limits or minimum lease terms?
  • When was the last reserve study, and is it funded?

Tips for Condo Buyers

Ask your lender to check the project before you write an offer, or as early in the inspection period as possible. Review the HOA disclosures for special assessments, low reserves or litigation. And plan your exit: non-warrantable units can take longer to resell.

Sample Forms

Blank samples for reference: Fannie Mae’s condo questionnaire and the Arizona REALTORS® HOA addendum. We’ll complete the current version together.

Condominium Project Questionnaire (Fannie Mae Form 1076) sample

Condominium Project Questionnaire (Fannie Mae Form 1076)Updated Dec 2021 · 8 pagesCompleted by the HOA so your lender can review the condo project.View sample (PDF) →
HOA Addendum sample

HOA AddendumUpdated Sep 2026 · 3 pagesSeller’s notice of HOA information and fees.View sample (PDF) →

Unfamiliar term? Browse the Real Estate Glossary →

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General information only. Guidelines change and vary by lender; your loan officer will confirm whether a specific project qualifies.