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From a business point of view, condo financing is one of the most complicated mortgage products we deal with at AmeriSave. I've been working in mortgage operations since 2008, when the housing crisis started. I've seen how condo lending standards changed a lot because of that market crash. The truth is that getting a condo isn't just about being able to borrow money anymore. You're basically asking lenders to back you and a whole building full of other unit owners, the association that manages them, and the financial health of that group as a whole.
This is how the process really works. Our underwriting teams look at the borrower's credit, income, and assets the same way they would for any other mortgage application when someone applies for a condo loan. But then we look at the condo project itself in a second layer of analysis. We're looking over the HOA budgets, checking the insurance policies, figuring out what percentage of units are owner-occupied versus rented, checking for pending lawsuits, and figuring out if the reserve fund is big enough. No matter how good the individual borrower looks on paper, all of these project-level factors can decide whether or not the loan is approved.
I live in Louisville, Kentucky, with my family. I have three kids who always remind me of what's important in the real world. When I talk to buyers about condo financing, I try to put myself in their shoes and think about what would be important to me. Would I know why the lender wants six months' worth of HOA meeting minutes? Would I know to check if the building is on Fannie Mae's list of approved buildings? Would I know that the HOA just voted to charge me an assessment that could make it impossible for me to get a loan even though I haven't closed yet?
The National Association of Realtors' 2025 data shows that condominiums and co-ops made up about 8.2% of all home sales in the US. They were especially popular in cities, where they made up 25–40% of all available homes. Condos are often the first homes that first-time buyers in cities like Miami, New York, Chicago, and San Francisco can afford because they can't afford detached single-family homes. In late 2025, the median price of a condo in the US was $298,000, while the median price of a single-family home was $412,000. This made condos a good choice for people who wanted to live in a city and save money.
This guide goes over the ten most important things about condo financing that every potential buyer needs to know before making an offer. Underwriters care about more than just these technical details. There are real-world factors that will decide if you can buy your dream condo or if it falls through three weeks before the closing date when the lender finds a problem with the project that can't be fixed. Knowing these things ahead of time will help you shop smarter, negotiate better, and avoid heartbreak later on.
Single-family home financing focuses almost exclusively on the individual borrower and the specific property. The lender examines your credit, verifies your income, appraises the house, and makes a lending decision based primarily on whether you can afford the payment and whether the property value supports the loan amount. Condo financing adds an entirely separate risk layer because your unit exists within a larger legal and financial structure that could affect the property's value and marketability regardless of your personal financial strength.
When lenders give money for condos, they're worried about concentration risk, which is when too many units in the same building are financed by the same lender. If the HOA has money problems or the building has a big structural problem, several units could default at the same time. They are concerned about the project's financial stability because a HOA that is running a deficit or doesn't have enough reserves could charge special assessments that could cause owners to stop paying their bills. They look at marketability risk because some features of the project make it harder to sell condos if they have to go into foreclosure.
According to Fannie Mae's 2025 Selling Guide, these concerns translate into specific project eligibility requirements that condos must meet before conventional financing is available. These requirements have evolved significantly since the 2008-2012 housing crisis, when condo values fell more steeply than single-family homes and lender losses on condo portfolios exceeded losses on comparable single-family loans.
The additional risk translates directly into pricing and qualification standards. Based on current AmeriSave rate data as of December 2025, conventional condo loans typically carry interest rate premiums of 0.125 to 0.375 percentage points compared to single-family home loans with identical borrower characteristics. On a $300,000 loan, a 0.25 percentage point rate increase adds approximately $45 to your monthly payment and roughly $16,200 in additional interest over 30 years.
Down payment requirements also run higher for condos. While conventional single-family home loans are available with as little as 3% down for qualified first-time buyers, most lenders require 10-15% minimum down payment for warrantable condos and 20-25% for non-warrantable condos. FHA condo loans offer more flexibility with 3.5% down payments, but only for projects on FHA's approved condominium list.
Condo loan processing takes longer than single-family home financing because of the project review requirement. Single-family purchases typically take 30-45 days from application to closing. Condo purchases often require 45-60 days or longer, particularly if the building hasn't been reviewed recently or if the lender identifies project issues requiring clarification. This extended timeline can affect offer competitiveness in multiple-offer situations where sellers prefer quick closings.
A condo that is warrantable meets the eligibility requirements set by Fannie Mae and Freddie Mac. This means that it can get conventional financing with standard terms and competitive interest rates. Freddie Mac's 2025 Condo Project Manager guidelines say that to be warrantable, a condo must meet certain criteria in a number of areas.
Owner-occupancy rules say that at least half of the units must be primary residences owned by the owner. Single-entity ownership limits say that no one owner or investor can own more than 20% of the total units in an established project or 10% of the total units in a new construction project. For established projects, commercial space is limited to 35% of the total building square footage, and for new construction, it's limited to 25%. Financial health standards say that the HOA must keep enough reserve funds, usually at least 10% of the annual budget, and keep the number of unit owners who are behind on their payments below 15%.
Insurance coverage rules say that the HOA must have enough hazard insurance, fidelity bond coverage to protect against fraud or embezzlement, and directors and officers liability insurance. Legal status requirements say that the HOA can't be involved in any lawsuits that are still going on, except for a few routine matters that aren't likely to have a big impact on the project. Most of the time, project completion standards say that at least 90% of the units must be sold and closed for new construction, but this depends on the program.
If a condo doesn't meet the criteria for being warrantable, it becomes non-warrantable, which greatly limits financing options. The Mortgage Bankers Association's 2025 data shows that about 15–20% of condominium projects don't meet warrantable standards because they have one or more disqualifying features. One common reason for disqualification is that fewer than 50% of the owners live in the building, which is often the case in buildings with a lot of investors or short-term rentals. Concentration of single-entity ownership, especially in newer buildings where developers keep unsold units. Commercial space that goes over limits, which is common in mixed-use developments with stores on the ground floor. A lawsuit against the HOA that is already in the works or is about to happen. Policies that have run out or don't cover enough. High delinquency rates, which are usually 15% or more of owners who are behind on their HOA dues.
People who buy condos that aren't warrantable have to pay higher interest rates, usually 0.5 to 1.5 percentage points more than the rates for warrantable condos. Higher down payments are usually needed, at least 20–25%. Fewer lenders to choose from, since many lenders won't lend money for projects that aren't warrantable. Portfolio loan products instead of traditional financing, which usually has worse terms. Some buyers get around the non-warrantable status by paying cash up front and then refinancing later if the project becomes warrantable. Some people are willing to pay more for financing in exchange for a better location or building amenities.
Lenders require extensive HOA documentation to assess project financial stability. The HOA questionnaire completed by the association management company provides standardized information about the project including the number of units, owner-occupancy percentages, commercial space allocation, pending legal matters, insurance coverage details, special assessments, budget information, and contact details for officers and management.
HOA budgets and financial statements for the most recent fiscal year demonstrate financial stability and adequate reserve funding. Many lenders require two years of financial statements for thorough analysis. Meeting minutes from the past 6-12 months reveal discussion of assessments, litigation, major repairs, financial challenges, and owner disputes that might not appear in formal financial statements. Insurance certificates documenting all required coverage with policy details, limits, deductibles, and named insureds. Reserve study documenting planned future expenses and adequacy of current reserve funding.
According to AmeriSave's operational experience, obtaining complete HOA documentation often represents the most time-consuming aspect of condo loan processing. Well-managed associations typically provide requested documents within 7-10 business days. Poorly managed associations or those using volunteer boards may take 3-4 weeks or longer, potentially jeopardizing closing timelines.
Underwriters look at HOA financial statements to see if they show signs of stability or trouble. Reserve fund adequacy looks at how much money is currently in the reserves compared to how much money reserve studies say should be there. Depending on the age and condition of the building, industry standards say that reserves should be 10% to 30% of the annual operating budget. Monthly payments from unit owners to the HOA show whether the association makes enough money on a regular basis. If contributions are not being collected as expected, it could mean that the owner is having financial problems.
Delinquency rates that show what percentage of owners are behind on their HOA dues are very important. When rates go above 15%, it usually raises concerns about warrantability because high delinquency means that many owners are having money problems. Special assessments that were planned or recently imposed indicate insufficient reserve funding or unforeseen significant expenditures. Big assessments can make it harder for some borrowers to qualify by raising their monthly housing costs. When an association has a budget deficit or an operating loss, it means that it spends more than it brings in. This could mean that dues need to go up in the future or that special assessments need to be made.
The FHA's approved condominium list, which is a searchable database kept up by the Department of Housing and Urban Development, must include the projects that are getting FHA condo financing. As of December 2025, HUD data shows that about 45,000 condominium projects across the country have active FHA approval. This is about 40% of all eligible projects.
Getting FHA approval is very helpful for buyers. You can get a down payment as low as 3.5% and a credit score as low as 580. Debt-to-income ratios that are more flexible, with up to 50% allowed with compensating factors. Project standards that are less strict than normal warrantable requirements. Ability to pay for condos that regular lenders won't.
But getting FHA approval isn't always easy or permanent. Projects must apply through FHA-approved lenders or direct endorsement underwriters, send in the necessary paperwork to show that they meet FHA standards, and get their approval renewed every three years with new paperwork. In 2019, HUD added single-unit approval options. This means that you can finance a single unit in a building that isn't normally approved if certain conditions are met. This gives the FHA more access to buildings where full project approval isn't possible.
There are a few important ways in which FHA condo standards are different from regular warrantable standards. Owner-occupancy rules say that at least 50% of the units must be owner-occupied, which is the same as standard rules. Commercial space limits allow up to 35% of the space to be used for non-residential purposes, which is a little more flexible than the limits for new construction. Insurance requirements say that you need enough hazard and liability coverage, but they also say that you need FHA-specific policy provisions. Under single-entity ownership caps, investors can only own 10% of the units for spot approval, which is stricter than normal limits.
Down payment requirements for primary residence condos vary significantly by loan type and project characteristics. FHA loans on approved condos require 3.5% down with credit scores of 580 or higher, or 10% down with scores of 500-579. These represent the most accessible financing options for buyers with limited savings. VA loans for eligible military borrowers allow 0% down payment on approved projects, offering unmatched accessibility for qualified veterans and active service members.
Conventional loans on warrantable condos typically require 5-10% down for well-qualified borrowers with strong credit, though some programs allow 3% down for first-time buyers in lower loan amounts. Conventional loans on non-warrantable condos demand 15-25% down due to higher risk profile. Portfolio loans or private financing often requires 20-30% down with terms varying significantly by lender.
According to Freddie Mac's 2025 Primary Mortgage Market Survey, the median down payment on primary residence condos was 12% compared to 8% for single-family homes, reflecting higher requirements and reduced low-down-payment options for condos.
Down payment requirements increase substantially for non-primary-residence condos. Second home condos typically require 10-15% down minimum with conventional financing, often matching or exceeding primary residence requirements. Investment property condos demand 15-25% down minimum, with many lenders requiring 20-25% regardless of borrower strength.
Condo financing carries rate premiums over comparable single-family home loans due to perceived higher risk. Current market data shows warrantable primary residence condos typically incur 0.125-0.250 percentage point rate premiums versus similar single-family loans. Warrantable investment property condos face 0.250-0.500 percentage point rate premiums. Non-warrantable condos of any occupancy type experience 0.500-1.500 percentage point premiums depending on disqualifying factors and lender appetite.
These rate premiums mean that costs go up every month in a way that can be measured. Think about a 30-year fixed-rate mortgage for $300,000 with different rate premiums. If the base rate is 6.50% for a single-family home, the monthly payment is $1,896, and the total interest over 30 years is $382,633. With a 6.75% interest rate and a 0.25% condo premium, the monthly payment is $1,946, the total interest is $400,439, and the extra cost is $17,806. With a 7.00% interest rate and a 0.50% condo premium, the monthly payment is $1,996, the total interest is $418,527, and the extra cost is $35,894. The monthly payment is $2,098, the total interest is $455,089, and the extra cost is $72,456 at a 7.50% rate with a 1.00% non-warrantable premium.
Special assessments are one-time or temporary fees levied by HOAs to cover expenses exceeding regular budget capacity. Common reasons include major capital improvements like roof replacement, elevator modernization, building facade repairs, parking lot repaving, or HVAC system overhauls. Emergency repairs addressing unexpected damage or safety issues. Legal settlements or insurance deductibles following major incidents. Reserve fund replenishment after depletion. Required improvements mandated by local government or insurance companies.
According to the Community Associations Institute's 2025 survey of HOA operations, approximately 18% of condominium associations levy special assessments in any given year, with average assessment amounts ranging from $2,500 to $8,500 per unit depending on building size, age, and issue severity.
Special assessments affect mortgage applications in multiple ways. Lenders add monthly assessment payments to debt-to-income calculations when paid over time. A $12,000 assessment paid over 24 months adds $500 monthly to housing costs, potentially disqualifying borrowers near maximum DTI limits. Lump-sum assessments due at or before closing must be paid by buyer unless seller agrees to cover them, increasing required cash to close.
The condo questionnaire is a standard form that gathers important project information for lenders to look over. Fannie Mae Form 1076 and Freddie Mac Form 476 are the most common types, but lenders may also use their own forms with similar information. The HOA management company, board member, or another authorized person who can see association records must fill out the questionnaire.
Some of the most important information that is collected includes the total number of units in the project, the number of units that are owner-occupied versus rented, the percentage and square footage of commercial space, information about the concentration of ownership in a single entity, current and planned special assessments, pending or threatened lawsuits, details about insurance coverage with policy numbers and limits, budget information and reserve fund balances, the percentage of owners who are late on their HOA dues, and contact information for association management.
Well-managed associations with responsive management companies typically complete questionnaires within 5-10 business days. Associations using volunteer boards or small management firms may require 2-4 weeks or longer. Buildings without professional management may take even longer or produce incomplete responses requiring follow-up.
HOA dues are included in housing cost calculations for debt-to-income ratio purposes, directly impacting how much home you can afford. Lenders add monthly HOA fees to principal, interest, property taxes, and homeowners insurance when calculating front-end DTI ratios. This combined housing payment is then added to other monthly debt obligations like car payments, student loans, and credit cards to calculate back-end DTI ratios.
According to the Community Associations Institute's 2025 data, median monthly HOA fees vary significantly by region and building type. Low-rise condos typically charge $200-400 monthly. Mid-rise condos with elevators average $300-500 monthly. High-rise luxury buildings often charge $500-1,200 or more monthly. Resort-style communities with extensive amenities may exceed $1,500 monthly.
Consider a buyer qualifying with a 43% maximum back-end DTI earning $6,000 monthly gross income. Maximum allowable monthly debt equals $2,580. With $400 car payment and $200 student loan payment, maximum housing payment equals $1,980. A condo with $400 monthly HOA fees versus $0 for a single-family home reduces the amount available for mortgage payment by $400 monthly, translating to roughly $65,000 less home price affordability at current interest rates.
A lot of condo associations don't allow or limit short-term rentals through sites like Airbnb, VRBO, and others. The Community Associations Institute's 2025 survey found that about 65% of condominium associations have rules against short-term rentals. This is up from 47% in 2020. Some of these rules are total bans on rentals of less than 30 days, while others limit the number of units that can be rented short-term or require registration and payment of fees.
Buyers purchasing condos as investment properties face additional hurdles beyond standard down payment and rate premiums. Many lenders limit the number of financed investment properties per borrower to 4-10 properties depending on program and borrower qualifications. Investment property loans require higher credit scores, typically 680-720 minimum depending on down payment and loan program.
According to Freddie Mac's 2025 investor data, approximately 22% of condominiums are investor-owned compared to 18% of single-family homes, though percentages vary dramatically by market. Urban high-rise buildings and resort-area condos often see investor concentration exceeding 40-50%, potentially pushing projects toward non-warrantable status.
In 2026, getting a loan for a condo will require knowing both how to qualify for a traditional mortgage and the specific project-level factors that can affect loan approval. From an operational point of view, buyers who learn about warrantability requirements, HOA financial health indicators, and project documentation needs are better prepared for transactions that go more smoothly and with fewer surprises.
Checking FHA approval lists and asking for preliminary HOA documentation are two important steps to making offers that will be successful. Knowing what a reasonable down payment and interest rate are for the type of property you're interested in will help you avoid disappointment when you get formal quotes. Adding extra time to your purchase schedule will help you deal with the longer processing times that condo loans need. Working with lenders who know the local condo markets well will help you get through project-specific problems.
Since I joined AmeriSave in 2015, we've helped thousands of people buy condos. We've worked on everything from simple FHA-approved buildings to complicated non-warrantable projects that needed portfolio lending solutions. The best buyers are those who have realistic expectations about the requirements, timelines, and costs of condo financing, but are also willing to be flexible when problems come up that need creative solutions.
Keep in mind that owning a condo has real benefits, such as lower prices, less maintenance work, desirable city locations, and access to building amenities. For a lot of buyers, especially first-time buyers in expensive markets, condos are the only way they can afford to buy a home. You don't have to avoid condos just because you understand how complicated the financing is. This means being knowledgeable and ready for the special things about this type of property when you buy it.
For FHA condo loans, the building must be on FHA's list of approved condos or meet certain requirements for single-unit approval. As of December 2025, about 45,000 projects across the country have FHA approval. This is only about 40% of all buildings that could get it. You can use the building address or project name to search the FHA condo approval database on HUD's website. You or your lender can start the approval process if the building meets FHA requirements but hasn't been approved yet. This usually takes 4 to 8 weeks, and the HOA must help by giving the necessary paperwork. Single-unit approval, which started in 2019, lets FHA financing happen in buildings that aren't approved as long as certain conditions are met. These include the building being finished for at least a year, at least 50% of the units being owner-occupied, no more than 10% of the units being owned by a single entity, having enough insurance, and being in good financial shape. Your lender can tell you if single-unit approval is possible for the building you want.
Lenders charge more for condo loans because they think condos are riskier investments for a number of reasons. Concentration risk concerns come up because if the HOA has money problems or the building has major structural problems, several units in the same building could default at the same time. Second, if the HOA's finances are unstable, special assessments can put a strain on the finances of many owners at once. Third, condos have historically had more price swings than single-family homes during market downturns. Fourth, it is harder to sell foreclosed condos than single-family homes because of limits on resale marketability. Fifth, issues at the project level can lower the value of a property, even if the individual units are in good shape. During the housing crisis from 2008 to 2012, these risk factors caused condo loans to have higher loss rates that could be measured. As a result, lenders charged these products with permanent rate premiums. Current market data shows that warrantable condos usually have rate premiums of 0.125–0.375 percentage points, while non-warrantable condos usually have rate premiums of 0.500–1.500 percentage points. These premiums do add to the cost, but they aren't that high compared to the lower prices that condos often offer, which makes them more affordable.
Pending lawsuits don't automatically stop condo projects from getting financing, but lenders need to carefully look at the lawsuit's nature, possible effects, and likelihood of causing material harm to the project. Things like collecting money from owners who are behind on their payments or small contract disputes usually don't affect whether a property is warrantable. Claims of major structural defects, lawsuits over construction defects, environmental hazards, or class action lawsuits involving more than one owner can make projects temporarily unfinanceable until they are settled. Lenders look at pending lawsuits by going over legal documents to understand the claims and possible exposure, figuring out if the issues could have a big impact on property values or the association's financial stability, checking to see if there is enough insurance coverage or reserves to cover possible judgments, and thinking about whether Fannie Mae or Freddie Mac would buy the loan if there was a lawsuit. As part of the condo questionnaire process, your lender will ask about any legal issues that are still going on and may ask for opinion letters from the association's lawyer that explain the claims and what will probably happen.
There are a few ways that special assessments affect your ability to get a mortgage. Lenders may lower the amount of home you can afford by adding the monthly payment amount to your housing costs when they figure out your debt-to-income ratio. If you have to pay the assessment in full at or before closing, you have to pay it as part of your closing costs unless the seller agrees to pay it. This means you need more cash to close. If assessments are high or happen a lot, they could mean that the HOA isn't managing its money well, which could affect the status of the warrant. Lenders may ask for more reserves or refuse the loan if it is pending but not yet levied because they are not sure what will happen. For example, you're buying a condo for $300,000 and the HOA is charging you $15,000 for a special assessment to replace the roof. You have to pay this over 30 months at $500 a month. For DTI calculations, this $500 payment is added to your housing costs. If your DTI is already at its highest level, this extra $500 a month could make you ineligible for the loan. If the assessment is due as a $15,000 lump sum at closing, on the other hand, you will need an extra $15,000 in cash on top of your down payment and closing costs. Before making an offer, always ask the seller directly about pending assessments and get the most recent HOA meeting minutes.
Warrantable condos meet the requirements set by Fannie Mae and Freddie Mac, which means they can get regular financing with standard terms and competitive rates. Non-warrantable condos don't meet one or more of the requirements for financing, which makes it harder to get a loan and raises costs. The difference is important because it has a big impact on your financing terms, such as interest rates. Warrantable condos have rate premiums of 0.125–0.375 percentage points, while non-warrantable condos have premiums of 0.500–1.500 percentage points or more.
For properties that can be warranted, the down payment is usually 10–15%, while for properties that can't be warranted, it's 20–25%. Warrantable condos are easier to get a loan for because many lenders won't lend money for non-warrantable projects at all. Some common non-warrantable traits are less than 50% owner-occupancy, more than 20% single-entity ownership of units, more than 35% commercial space of total building area, pending lawsuits against the HOA, not enough insurance coverage, delinquency rates over 15%, or a lot of short-term rentals.
Before you make an offer, check with your lender to see if the project is warrantable using the building address and project name.
Yes, veterans, active-duty military members, and surviving spouses who meet certain criteria can use VA loans to buy condos. However, the property must meet VA approval requirements. The VA has a list of approved condo projects, just like the FHA does, but the requirements for being on the list are different. As of December 2025, the VA had approved about 31,000 projects, which is less than the FHA's 45,000 approved projects. VA condo approval requires a legal review to make sure that the project is a real condominium under state law, that at least 50% of the units are owner-occupied, that no one person owns more than 10% of the units, that there is enough insurance coverage (including hazard and liability policies), that the project is in good financial shape with enough reserves, that no more than 15% of owners are behind on their HOA dues, and that at least 90% of the units have been sold and closed for new construction. VA loans are great for condo buyers who qualify because they don't require a down payment, don't have to pay monthly mortgage insurance, have interest rates that are usually lower than those of regular loans, and have credit requirements that are more flexible. The main problem is that a lot of condo buildings don't have VA approval, which means there aren't as many available.
Closing costs for condos are usually the same as those for single-family homes, usually between 3% and 6% of the purchase price. However, some fees are only for condos and add to the total. Standard closing costs that are the same for everyone include loan origination fees, which are usually 0.5% to 1% of the loan amount; appraisal fees, which are $400 to $600; title insurance and settlement fees, which are 0.5% to 1% of the purchase price; and recording fees, which depend on local rates. Costs that are specific to condos include HOA document fees of $100 to $500 for filling out a questionnaire, condo association transfer fees of $200 to $800 depending on the building, first month's HOA dues that are often collected at closing, and special assessment prorations if assessments are pending or have just been levied. If you buy a $300,000 condo, your closing costs will be between $9,000 and $18,000, depending on your down payment, loan type, and local fees. You can ask the seller to cover some of the closing costs, but the lender has limits on how much they can do this based on the type of loan and the amount of the down payment. FHA loans let sellers give up to 6% of the sale price, VA loans let sellers give up to 4%, and conventional loans let sellers give up to 3% to 9% of the sale price, depending on the size of the down payment.
Carefully look over the HOA's financial statements to see how well the group is doing financially and to find any possible issues. Check the reserve fund balances, which should be between 10% and 30% of the annual operating budget. For older buildings that expect to have big capital expenses, higher percentages are better. Collections from monthly assessments should show steady or rising revenue and a delinquency rate of less than 15%. The difference between operating expenses and revenue should show that the association is collecting enough monthly dues to cover its regular costs without having to use its reserves to do so. When there are budget deficits, it means that there isn't enough money, which means that dues will have to go up in the future. Recent or planned special assessments suggest that there isn't enough money in the reserve or that there are some big expenses that weren't expected. Insurance coverage should include enough policies with the right limits and no gaps. If legal costs are big line items, it could mean that there is still a lawsuit going on. The fees and contracts for management should be fair for the size of the building and the services it offers. Deferred maintenance becomes clear when little money is spent on building upkeep even though the infrastructure is getting older.
Lenders look at a number of factors when deciding how risky a loan is, and these factors make condos harder to sell than similar single-family homes. People who want to buy a condo can only do so if they can get a condo-specific loan. This makes the pool of potential buyers smaller than for single-family homes, which have more flexible financing options. After you buy a property, there may be project-level problems that make it harder to sell all of the units, no matter how well they are maintained. If the building gets too many investors, owner-occupancy requirements could limit the number of investors who can buy it. HOA approval requirements make the sales process harder because many buildings require buyers to get approval from the association. The National Association of Realtors says that condos took an average of 38 days to sell in 2025, while single-family homes took an average of 28 days. Because lenders know that it might be hard to sell foreclosed units, they charge higher interest rates on condo loans. Condos in good neighborhoods with good HOA management and good building reputations, on the other hand, may sell as quickly or even faster than single-family homes in less convenient areas.
There are a few ways to get money for non-warrantable condos, but they all have pros and cons compared to regular financing.
Local banks and credit unions that offer portfolio loans can set their own rules for these loans. Most of the time, these loans need 20–25% down, have interest rates that are 0.5–1.5 percentage points higher than normal rates, and may have penalties for paying them off early.
Non-QM lenders that focus on non-qualified mortgage products can help you buy a condo that doesn't meet agency guidelines. They usually require 20–30% down and charge 1–2 percentage points more than regular rates. If the project has FHA approval, FHA financing may still be available, even if it isn't normally warrantable. With cash purchases followed by delayed financing, buyers can pay cash up front and then get financing 6 to 12 months later if things get better. Before looking for non-warrantable financing, make sure you know exactly why the project doesn't meet the rules and whether the problems are short-term or long-term. Temporary problems, like lawsuits that are still going on, may be over in 6 to 12 months, which would make it possible to refinance at better terms. Take into account the higher costs of financing when figuring out what you can afford. A condo that costs $300,000 at 8% instead of 6.75% costs $75 more a month and $27,000 more over 30 years.
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