Mark Cohen | Cohen Financial Group | #1 Mortgage Broker in the U.S., 2026 Scotsman Guide
Also ranked #1 in Non-QM Volume (2026 Scotsman Guide), with consistent industry-wide recognition from National Mortgage News and HousingWire.
Quick Answer
Non-warrantable condo loans can provide an alternative when a condo project does not meet conventional financing guidelines because of factors such as litigation, rental concentration, commercial space, or HOA financial concerns. Non-QM programs may offer other financing structures for qualifying borrowers and properties, subject to lender and program requirements.
In This Article
Finding the right condo does not always mean finding the right mortgage. A buyer may meet the lender’s financial requirements, yet the loan can still be declined because the condo project or HOA does not meet conventional financing guidelines.
A non-warrantable condo is a property in a project that does not satisfy certain conventional or agency-backed eligibility requirements. In these situations, a non-QM mortgage may provide an alternative for qualified borrowers and properties.
Let’s tackle what can make a condo non-warrantable, what financing alternatives may be available, and how Cohen Financial Group evaluates these scenarios.
What Makes a Condo Non-Warrantable?
A non-warrantable condo is a property that does not meet the eligibility requirements of certain conventional financing programs. The designation usually relates to characteristics of the condo project, rather than the individual unit.
Common reasons a condo project may be considered non-warrantable include:
- Pending litigation: Certain types or amounts of litigation involving the HOA or project may affect financing eligibility.
- High rental or investor concentration: A high percentage of rented or non-owner-occupied units may fall outside some conventional guidelines.
- Commercial space: A significant amount of commercial or other non-residential space can affect project eligibility.
- HOA delinquencies: High levels of unpaid assessments may raise concerns about the project’s financial condition.
- Project condition or financial concerns: Structural, physical, insurance, or other financial issues may also affect eligibility.
Conventional lenders must follow specific project-level guidelines when determining whether a condo qualifies for financing. As a result, a property may be difficult to finance conventionally even when the buyer meets the lender’s individual qualification requirements. A non-QM loan in Los Angeles may provide an alternative in some cases, depending on the project and loan program.
Non-warrantable does not necessarily mean a condo is a bad property. It means the project may not fit a particular lender’s financing guidelines.
Why Can Non-QM Financing Be an Option for a Non-Warrantable Condo?
When a condo falls outside conventional project guidelines, non-QM loan lenders may offer another path to financing. Non-QM programs can use different property eligibility and underwriting guidelines, giving lenders additional flexibility to evaluate certain projects that conventional financing may not accommodate.
- Different project eligibility criteria: A non-QM program may allow a lender to consider a condo that does not meet conventional project requirements, depending on the reason for the property’s ineligibility.
- Greater flexibility for unusual project characteristics: Some non-QM programs may consider condo projects with characteristics that fall outside conventional guidelines, subject to the lender’s specific requirements and review.
- More ways to evaluate the overall transaction: Depending on the program, a lender may consider factors beyond standard conventional underwriting criteria when assessing the property and borrower together.
- Financing can be tailored to the borrower’s situation: Once the property is considered eligible, different structures may be available based on the borrower’s circumstances, including bank statement, asset depletion, or DSCR programs where applicable.
- A conventional denial is not necessarily the end of the process: A condo that does not qualify for one financing program may still qualify for another, depending on why it was declined and the requirements of the alternative program.
Non-QM financing does not automatically make a non-warrantable condo eligible. The lender must still determine whether the specific project and transaction meet its guidelines.
What Documentation Is Needed for a Non-Warrantable Condo Loan?
Financing a non-warrantable condo typically involves reviewing both the borrower and the condo project. The exact requirements vary by lender, loan program, and the reason the property falls outside conventional guidelines.
| Borrower Documentation | Condo-Project Documentation |
|---|---|
| Income and employment or business information | HOA budgets and financial statements |
| Bank or asset statements | Master insurance information |
| Identification | HOA questionnaire |
| Credit information | Pending litigation details |
| Owner-occupancy and rental information | |
| Details about commercial space |
Project documentation can be just as important as borrower documentation because the lender must evaluate whether the specific condo project fits the program’s property requirements. As such, buyers should identify required project documents early, particularly before making an offer or committing significant funds. This can help surface potential financing issues before the transaction progresses.
Do Non-Warrantable Condo Loans Have Higher Interest Rates?
Non-warrantable condo financing may carry a higher rate than conventional condo financing, depending on the loan program.
- The property may carry additional project-level considerations: Characteristics that make a condo non-warrantable can affect how a lender evaluates and prices the transaction.
- Non-QM programs have their own pricing structures: Non-QM mortgage rates are determined by the specific program and the borrower and property qualifications rather than a single standard rate.
- The available alternative matters: If conventional financing is not available for the property, the relevant comparison is the cost of the financing structure that is actually available, rather than a conventional rate the property cannot qualify for.
Buyers should compare more than just the interest rate, including cash required to close, fees, loan structure, and long-term financing cost. Current pricing should be confirmed based on the specific property and borrower.
How Does Cohen Financial Group Evaluate a Non-Warrantable Condo?
Financing a non-warrantable condo requires looking beyond the borrower’s qualifications. At Cohen Financial Group, the evaluation considers both the condo project and the borrower to determine whether an alternative financing structure may fit.
- Review the project’s context: Examine relevant HOA documents, insurance, litigation, rental concentration, commercial space, financial condition, and other applicable factors.
- Review the borrower’s credentials: Assess credit, income, assets, down payment, occupancy, and other qualifications relevant to potential loan programs.
- Match the borrower and property to the right financing structure: Evaluate available non-QM programs and lender guidelines to identify the structure that best fits the borrower’s financial profile, the condo project, and the property’s intended use.
- Review the economics: Compare the potential rate, cash required to close, fees, loan structure, and other costs so the borrower understands the financing.
This 360-degree approach is particularly relevant for complex and non-QM scenarios. Mark Cohen‘s 2026 Scotsman Guide rankings provide a relevant industry benchmark: he ranked No. 1 in Top Non-QM Volume, closing 262 non-QM loans worth $417.1 million.
Frequently Asked Questions
What makes a condo non-warrantable?
Factors can include certain litigation, high rental or investor concentration, commercial space, HOA delinquencies, and other project-level issues, depending on the applicable guidelines.
Can you get a mortgage on a non-warrantable condo?
Yes, some lenders offer financing for qualifying non-warrantable condos through non-QM programs, subject to the requirements of the property, borrower, and loan program.
Are non-warrantable condo loans more expensive?
They may have higher rates or costs than conventional financing because the lender may be evaluating different property characteristics, risk considerations, and underwriting requirements.
Can an investment condo be non-warrantable?
Yes. An investment condo can fall outside conventional project guidelines, although the specific reason for the property’s ineligibility will determine which financing options may be available.
What documents are needed for a non-warrantable condo loan?
Lenders may require both borrower and project documentation, including income and asset information, HOA financials, insurance details, and other information about the condo project. A non-QM mortgage may be one financing option, depending on the property and borrower.
Find the Right Financing Path for Your Condo
If you’ve been told your condo cannot be conventionally financed, don’t assume the purchase is off the table. Non-QM loan lenders may offer alternative financing structures for qualifying properties and borrowers. Request a financing review to evaluate the condo project, your financial profile, and available options. Eligibility depends on the specific property, documentation, borrower, and loan program.
Or call 310.777.5401
This article is for general informational purposes only and does not constitute financial, legal, or tax advice, a commitment to lend, or a guarantee of loan eligibility, terms, or approval. Non-QM loan programs, rates, and eligibility requirements vary by lender and are subject to change, and are subject to borrower and property qualification. Consult a Cohen Financial Group loan officer regarding your specific situation.