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Not All Condos Qualify for Traditional Financing. Here’s What Buyers Should Know.

Did you know that two similarly priced condos in Winston-Salem could have very different mortgage financing options? The difference may have nothing to do with the buyer.

What Is a Warrantable Condo?

A warrantable condo generally meets applicable condo project guidelines established by Fannie Mae or Freddie Mac.

These requirements help lenders evaluate factors such as the project’s financial condition, insurance, ownership structure, and property maintenance.

What Is a Non-Warrantable Condo?

A non-warrantable condo doesn’t meet one or more applicable conventional project requirements.

Possible reasons include:

-Certain HOA financial concerns

-Inadequate insurance

-Significant deferred maintenance

-Certain pending litigation

-Condo-hotel characteristics

A condo’s classification can affect which mortgage programs are available, even when the buyer otherwise qualifies.

Can Non-Warrantable Condos Be Financed?

In some situations, yes.

Certain non-QM mortgage programs may offer financing for eligible non-warrantable condos. These programs have their own borrower and property eligibility requirements. It’s important to remember that non-warrantable doesn’t automatically mean unsafe, and alternative financing doesn’t guarantee a property will qualify.

Buying a Condo in Winston-Salem or Forsyth County?

Understanding the difference between warrantable and non-warrantable condos before making an offer can help you plan for potential financing requirements. As your mortgage resource, I can help you explore available programs and understand how the condo project’s eligibility may affect your purchase.

Don’t assume one loan program’s requirements tell the whole story. Let’s look at your options.