Guide
Condo Financing Requirements
Getting a mortgage on a condominium is not the same as financing a single-family home. Fannie Mae, Freddie Mac, the FHA, and the VA each maintain their own condo project approval criteria, and a building that fails any one of them can limit your financing options, your buyer pool when you eventually sell, and in some cases make a purchase impossible at conventional rates.
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Why condo projects are underwritten differently
When a lender finances a single-family home, the collateral is the property itself. When a lender finances a condo unit, the collateral is the unit plus a fractional interest in the association's common elements, reserves, financial health, and governance. A unit in a financially distressed association, or one where deferred maintenance has compromised the building's structure, is worth less than its interior condition implies — because the buyer inherits the association's problems. Fannie Mae and Freddie Mac, which purchase the majority of U.S. conventional mortgages in the secondary market, publish project eligibility criteria designed to protect that collateral. Those criteria are not fine print — they are the conditions under which lenders will fund the loan. A building that does not meet them will not qualify for a conventional conforming mortgage, which affects your rate, your down payment requirements, and the depth of your future buyer pool.
Fannie Mae and Freddie Mac warrantable project criteria
A condo project is generally considered warrantable — eligible for conventional financing through Fannie Mae or Freddie Mac — when it meets a set of project-level criteria evaluated at the time of each loan. Key requirements include: the association must generally budget at least 10 percent of assessments to reserves; no single entity (individual, investor, or developer) can own more than the allowable concentration of units (generally 10 percent or more triggers scrutiny; for smaller projects the thresholds differ); commercial and non-residential space must generally remain below 35 percent of total building square footage; the project must carry adequate insurance coverage; there must be no active special assessment that raises concerns about financial stability; and the project must not be subject to litigation that could materially affect the value or insurability of units. Projects with significant deferred maintenance, low reserve funding, or recent structural findings may also be flagged for additional review or denied approval. These are not hard rules that apply identically in every situation — lenders apply them with judgment — but they represent the categories that trigger project ineligibility.
FHA and VA approval: different programs, different rules
FHA-insured loans require the condo project to be on HUD's approved condominium project list. FHA approval is a formal application process, and many buildings — particularly smaller associations, older buildings, or those with high investor concentration — are not on the approved list. An FHA-ineligible building limits your buyer pool to conventional or cash purchasers, which can meaningfully affect price and marketability. VA loans follow a similar approval framework for veteran borrowers. Losing either program means a large category of qualified buyers cannot purchase in the building. Before you close on a unit you intend to sell in the future, confirm whether the building currently carries FHA and VA approval and ask whether there are any conditions that could cause that approval to lapse. FHA approval must be renewed periodically, and a lapse is not always publicized.
What makes a project non-warrantable
The most common reasons a project fails warrantability review include: reserve funding below lender thresholds, meaning the association has not set aside adequate capital for long-term maintenance; a single investor or entity controlling more than the allowable percentage of units; a high ratio of non-owner-occupied units indicating heavy investor concentration; active litigation involving the association, the developer, or the building itself; commercial or mixed-use space exceeding the allowable percentage; a recent problematic structural inspection or engineering report; and deferred maintenance that is visible and material. In Florida, post-2021 legislation and subsequent lender scrutiny of coastal condo buildings added a new layer: buildings with overdue milestone inspections, unresolved structural findings, or non-compliant SIRS reserve plans have faced conventional financing restrictions. This is not limited to Florida — the principle applies wherever structural or financial risk is elevated.
How to check a building's lender approval status
For FHA approval, you can search HUD's public condominium project approval database using the building's address or project name. For Fannie Mae and Freddie Mac warrantability, there is no public approval list — eligibility is determined at the time of each loan application based on the project questionnaire submitted by the lender. Your lender will typically order a condo project questionnaire from the association's management company, which asks for financial, legal, and structural information that the lender then evaluates against current guidelines. Ask your lender early in the process whether they have previously originated loans in the building, whether they see any potential approval issues based on what they know, and what documentation they will need. For buildings with known issues — ongoing litigation, recent structural findings, low reserves — getting a preliminary project review before going under contract can save you significant time and negotiation capital.
Portfolio loans, non-warrantable options, and their trade-offs
If a building does not qualify for conventional financing, portfolio lenders — banks and credit unions that hold loans on their own balance sheets rather than selling them into the secondary market — can sometimes offer financing outside the Fannie Mae and Freddie Mac guidelines. Portfolio loans typically carry higher interest rates, lower loan-to-value ratios, and shorter terms than conventional financing, and not every lender offers them for every non-warrantable situation. In some cases, the only available financing for a non-warrantable unit is a substantially higher down payment, a materially higher rate, or a cash purchase. The financing constraint also affects exit: if you cannot get a conforming loan when you buy, neither can most of your future buyers. A non-warrantable building purchased with a portfolio loan may need to be sold at a discount to cash or portfolio-loan buyers when you are ready to exit.
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Reviewer's checklist
- Ask your lender early in the process whether they have approved loans in this building before
- Search HUD's condo project approval database to confirm FHA approval status
- Ask whether the building carries current VA approval for veteran borrowers
- Request a copy of the most recent condo project questionnaire the association has submitted to lenders
- Confirm the reserve funded percentage and compare it to the general 10 percent budget-to-reserves threshold
- Identify whether any single owner or investor entity controls more than 10 percent of units
- Determine the ratio of owner-occupied to investor-owned units
- Identify any pending litigation involving the association, the building, or the developer
- Confirm commercial space occupies less than 35 percent of total square footage
- Ask the listing agent or association whether any buyers have had financing fall through in the past 12 months and why
- If the building has had a recent structural inspection or engineering finding, ask how lenders have responded
- If the building appears non-warrantable, ask your lender about portfolio loan options and compare terms
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Related reading
Buyer and owner guides on condo financing requirements
Florida SIRS Explained: What Boards Must Fund and Disclose
The Structural Integrity Reserve Study is now mandatory for most Florida condo buildings. Understand what a SIRS must include, how it affects reserve funding requirements, and what boards must disclose to owners.
Milestone Inspection Buyer Guide: Reading the Report Before You Close
Understand what a Florida Milestone Inspection report discloses, what follow-up questions to ask the engineer, and how to evaluate the special assessment risk the findings imply.
Texas HOA Resale Certificate: What to Verify Before Closing
Section 207.003 of the Texas Property Code defines what a resale certificate must contain. Review this checklist of what to verify — and what the certificate legally omits — before you close.
Should I Buy a Non-Warrantable Condo?
A non-warrantable condo is harder to finance, not impossible — the reason matters most. See what to check and get a free document review.
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Condo Buying Checklist
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Condo document review
A condo document review is the structured analysis of every disclosure document your seller or association has provided — declaration, bylaws, rules, reserve study, budgets, financials, meeting minutes, insurance summary, estoppel or resale certificate, and any pending special assessment notices.
Insurance risk
The association's master insurance policy determines what your personal HO-6 policy needs to cover — and what it does not.
By state
Condo Financing Requirements — state-specific guidance
The general framework on this page applies nationally. State law adds specific requirements buyers and owners should verify.
Florida
Florida condo financing requirements
Texas
Texas condo financing requirements
Arizona
Arizona condo financing requirements
California
California condo financing requirements
New York
New York condo financing requirements
New Jersey
New Jersey condo financing requirements
Maryland
Maryland condo financing requirements
Virginia
Virginia condo financing requirements
Michigan
Michigan condo financing requirements
Tennessee
Tennessee condo financing requirements
Minnesota
Minnesota condo financing requirements
Connecticut
Connecticut condo financing requirements
Delaware
Delaware condo financing requirements
District of Columbia
District of Columbia condo financing requirements
Utah
Utah condo financing requirements
Alaska
Alaska condo financing requirements
Vermont
Vermont condo financing requirements
West Virginia
West Virginia condo financing requirements
Nebraska
Nebraska condo financing requirements
Rhode Island
Rhode Island condo financing requirements
Colorado
Colorado condo financing requirements
Nevada
Nevada condo financing requirements
Georgia
Georgia condo financing requirements
North Carolina
North Carolina condo financing requirements
South Carolina
South Carolina condo financing requirements
Oregon
Oregon condo financing requirements
Washington
Washington condo financing requirements
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Massachusetts condo financing requirements
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Illinois condo financing requirements
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Pennsylvania condo financing requirements
Hawaii
Hawaii condo financing requirements
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Alabama condo financing requirements
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Maine Condo Financing Requirements
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Missouri condo financing requirements
New Mexico
New Mexico condo financing requirements
Ohio
Ohio condo financing requirements
Kansas
Kansas condo financing requirements
New Hampshire
New Hampshire condo financing requirements
Indiana
Indiana condo financing requirements
Wisconsin
Wisconsin condo financing requirements
Louisiana
Louisiana condo financing requirements
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Arkansas condo financing requirements
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Iowa condo financing requirements
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Kentucky condo financing requirements
Mississippi
Mississippi condo financing requirements
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Oklahoma condo financing requirements
Idaho
Idaho condo financing requirements
Montana
Montana condo financing requirements
North Dakota
North Dakota condo financing requirements
South Dakota
South Dakota condo financing requirements
Wyoming
Wyoming condo financing requirements
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