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  • What is a Non-Warrantable Condo Loan?

    by Matt Allen | Nov 17, 2022

    Sometimes condominiums don’t meet the conventional loan requirements needed to be approved by government-backed entities like Fannie Mae and Freddie Mac. These are called non-warrantable condos. To get financing for a loan to purchase a condo with this rating, borrowers will need to seek a lender that offers non-warrantable condo loans.

    When is a Condo Considered Non-Warrantable?

    Several factors can contribute to a condo being tagged as non-warrantable, including:

    • Ownership requires a membership, like a golf club.
    • The project is new construction and not completed yet.
    • One person or entity owns more than 10% of the total number of units.
    • The condo allows most units to be rentals and/or short-term rental units.
    • The condo developer hasn’t ceded control of the owner’s association.
    • More than 25% of the units in development will be used commercially.
    • There is litigation of any kind tied to the project.

    What are Non-Warrantable Condo Loan Requirements?

    Because lenders have to keep non-warrantable condo loans as portfolio loans, they will ask for specific requirements to ensure the borrower can pay back the loan. These requirements may include the following:

    • A minimum credit score of 680
    • Last two years of verifiable income, including W-2s and tax returns
    • A debt-to-income ratio (DTI) of no more than 45%
    • A loan term of 30 years or less
    • Points and fees cannot exceed 3% of the loan amount

    If you’re thinking of purchasing a non-warrantable condo, call the experts at NASB to help you get the financing at 855-921-4921, or click here for more information.

  • What is a Non-Warrantable Condo Loan?

    by Matt Allen | Nov 17, 2022

    Sometimes condominiums don’t meet the conventional loan requirements needed to be approved by government-backed entities like Fannie Mae and Freddie Mac. These are called non-warrantable condos. To get financing for a loan to purchase a condo with this rating, borrowers will need to seek a lender that offers non-warrantable condo loans.

    When is a Condo Considered Non-Warrantable?

    Several factors can contribute to a condo being tagged as non-warrantable, including:

    • Ownership requires a membership, like a golf club.
    • The project is new construction and not completed yet.
    • One person or entity owns more than 10% of the total number of units.
    • The condo allows most units to be rentals and/or short-term rental units.
    • The condo developer hasn’t ceded control of the owner’s association.
    • More than 25% of the units in development will be used commercially.
    • There is litigation of any kind tied to the project.

    What are Non-Warrantable Condo Loan Requirements?

    Because lenders have to keep non-warrantable condo loans as portfolio loans, they will ask for specific requirements to ensure the borrower can pay back the loan. These requirements may include the following:

    • A minimum credit score of 680
    • Last two years of verifiable income, including W-2s and tax returns
    • A debt-to-income ratio (DTI) of no more than 45%
    • A loan term of 30 years or less
    • Points and fees cannot exceed 3% of the loan amount

    If you’re thinking of purchasing a non-warrantable condo, call the experts at NASB to help you get the financing at 855-921-4921, or click here for more information.