In 2025, the U.S. condo market is showing signs of cooling, but that could present an opportunity for savvy brokers. Redfin reports the median condo sale price dropped 2.2% in May, landing at $354,100, the second-largest year-over-year drop since 2012. Sales fell nearly 12%, compared with a 3.7% decline in single-family home transactions.
What does this mean? Lower prices, less competition, and more motivated sellers in competitive urban and coastal markets.
But here’s the catch: many units fall short of agency guidelines, making them non-warrantable condos that traditional lenders won’t touch… unless you know where to turn.
What Makes a Condo Non-Warrantable?
A condo property is considered a non-warrantable condo when it doesn’t meet Fannie Mae or Freddie Mac guidelines. These government-sponsored entities set strict rules for the types of condo projects they’ll back. If a building doesn’t check every box, it’s out.
Common reasons a condo gets classified as non-warrantable include:
- High investor concentration: More than 50% of the units are non-owner occupied
- Ongoing litigation: The HOA is named in a lawsuit, even if it’s unrelated to the unit
- Low reserve funding: Less than 10% of the annual budget is set aside for reserves
- Delinquent HOA dues: More than 15% of units are behind on their fees
- Too much commercial space: The building includes more commercial than allowed
- Short-term rentals: Airbnbs or VRBO-style use may push the property into non-warrantable territory
- New construction: Projects with low owner occupancy or units still for sale
To the borrower, it often comes as a surprise. The property looks great. The location is solid. But the loan gets declined, not because of their finances, but because of the building.
What Brokers Should Watch For With Non-Warrantable Condos
The key to winning more of these deals is spotting the red flags early. As a broker, you can get ahead of issues by asking the right questions:
- Is the HOA involved in any lawsuits?
- What’s the investor-to-owner occupancy ratio?
- Are there reserve fund disclosures available?
- Does the building allow short-term rentals?
- Is the property mixed-use or include retail/commercial space?
You don’t have to do all the digging yourself. LendSure can help you evaluate the project early in the process. But a heads-up at the beginning can save you and your client a lot of time down the line.
Who’s Buying Non-Warrantable Condos?
This isn’t just a niche product for hard-to-place borrowers. You’re likely already working with clients who could benefit from non-warrantable condo financing; they just don’t know it yet.
Some common borrower profiles include:
- Self-employed buyers looking to finance in a building with high investor occupancy
- Foreign national borrowers purchasing in high-demand vacation markets
- Real estate investors financing a unit in a new development or short-term rental zone
- High-credit buyers pursuing a condo in litigation or new construction
- Clients with bank statement income that doesn’t fit traditional underwriting
These are viable, ready-to-go borrowers. They just need a lender who understands how to get these deals done.
LendSure’s Non-Warrantable Condo Loan Program
We built our program to give brokers and their borrowers more control, more flexibility, and more approvals on non-warrantable condo deals that traditional lenders won’t touch.
Here’s what you can expect:
- Loan amounts up to $3 million
- Up to 80% LTV
- Up to 50% commercial space permitted
- New construction allowed
- Available on DSCR / Investor Cash Flow programs
- Bank Statement and Foreign National options
- Purchase, rate-and-term, and cash-out refi available
Why Brokers Choose LendSure for Non-Warrantable Condos
At LendSure, we give brokers the tools, education, and support they need to capture more of those opportunities. We’re here to help you grow your business with loan solutions like non-warrantable condo loans, which can help clients move forward, even when the property doesn’t meet agency guidelines.
Here’s what you can expect from us:
- Commonsense underwriting for complex condo scenarios
- Fast pre-quals, often within 24 hours
- A deep bench of programs, including Foreign National, Bank Statement, and DSCR
- Ongoing support to help you say “yes” to more clients
THE LENDSURE WAY
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers, ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently owned property.
Are you ready to benefit from a common-sense approach to lending? Contact us today to learn more about non-warrantable condo loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
