By Ivan Mora · Florida-licensed real estate agent, License #3454593 · Updated November 12, 2026
A condo is called non-warrantable when the building doesn't meet the project standards Fannie Mae or Freddie Mac set for conventional loans they buy. Common triggers include unresolved critical repairs, litigation, commercial space, single-owner concentration, or a short-term-rental profile. It does not mean you can't buy — portfolio and non-QM lenders may still lend, usually with different down payment and rate terms. Ask your lender to review the building's condo questionnaire before you sign.
What makes a project non-warrantable
Fannie Mae Selling Guide B4-2.1-03 addresses commercial space, single-entity concentration, litigation and critical repairs. Its general commercial/nonresidential-space ceiling is 35%; for projects with 21 or more units its general single-entity limit is 20%. Smaller projects, master associations, exclusions and review pathways have different conditions, so these are screening questions—not a project approval.
Litigation is not an automatic rejection in every case: subject matter and stated exceptions matter. Unresolved critical repairs or evacuation orders require particular attention. Ordinary cosmetic maintenance is not the same as a safety-related critical repair. Ask the lender to document its classification and any evidence required to clear it.
Freddie Mac Guide §5701.3 is its ineligible-project framework. Freddie Mac Bulletin 2026-C updates project review and reserve requirements, retires the established-project investment-property 50% owner-occupancy test, and retires Streamlined Review for applications received on or after August 3, 2026. Do not apply an old investor-occupancy rule to every Hollywood condo. Have the lender identify the applicable agency, review type and effective-date requirements.
Questions to ask your lender first
- Can you screen this building before I make an offer?
- Which agency and current project-review pathway applies?
- What commercial-space, concentration, litigation, repair and reserve evidence is required?
- If it fails agency review, are portfolio options available and on what written terms?
- When must the questionnaire and repair evidence be received?
Questions to ask the association
- Has the building completed its milestone inspection and any required repairs?
- Is the association in litigation?
- What share of units are rented, and is any owner holding many units?
- Does the master policy meet lender requirements?
Request these answers in writing via the lender's questionnaire, not a verbal summary.
Financing a condo?
Let's check the building before you fall for the unit.
Send me the address and I'll help you line up the questionnaire and lender questions early. Call or text 8am–6pm, 7 days a week.
How to protect yourself in the contract
Build a financing contingency long enough for the condo review, and keep your deposit protected until the lender confirms project eligibility.
Sources and scope
- Freddie Mac Guide §5701.3 — Ineligible project framework; lender must apply current review pathway
- Freddie Mac Bulletin 2026-C — 2026 project review, reserve and owner-occupancy changes
- Fannie Mae Selling Guide — Project standards — Commercial space, concentration, litigation and critical repairs
- Florida Statutes §553.899 — Inspection status lenders ask about
Statutory text checked November 12, 2026. Educational guidance, not legal, engineering, lending or insurance advice. Building-specific deadlines, repairs, funding and coverage require current documents and qualified professional review. No association costs, inspection outcomes or insurance quotes are assumed.