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Condos have been hugely popular types of places to live. Especially for those who are just getting onto the property ladder. Owning a condo often also comes with amenity benefits, such as a spa, gym or retail facilities within the complex.

Many lenders nowadays are more hesitant to offer mortgages to those looking for a condo. In addition to this, governing agencies such as the FHA and the VA have a list of strict requirements you must meet in order to receive a mortgage on a condo.

What Sets Condos Apart From Other Properties?

By definition a condominium is actually a legal entity. One governed by a condo association, and their board of directors.

While condos are often believed just to be apartments in multi-unit buildings and high rises, it is their legal governance that actually defines them. 

So, townhouses and single family homes can also technically be condos. 

When you buy a condo you have to be approved to buy and live there by the association. You have to abide by the rules they set. You typically pay monthly, quarterly or annual dues, or all of them. Sometimes to multiple levels of associations.

Condos are broken down into two major groups – Warrantable and non-warrantable. If you’re searching for a loan on a warrantable property, the process is usually much easier when compared to their non-warrantable counterparts.

Non-warrantable condos can be more challenging to buy, sell and finance. Mainly due to fewer loan program options, and lenders willing to loan on them. 

Seattle’s Mortgage Broker has put together this article to inform and educate anyone that is looking to purchase a condo for their first home.

Can I Buy A Non-Warrantable Condo?

If you are able to overcome the challenges presented by lenders, then buying a condo is definitely something that can be achieved. 

There are many lenders that will offer you a mortgage, but these are often reserved for warrantable properties. If you’ve got your heart set on a non-warrantable condo, try to find a lender that provides portfolio loans. Meaning they do not need to sell them into the secondary market. These can be a favourable way of acquiring a home, with only a reasonable down payment required in most cases.

What Makes A Condo Warrantable?

According to governing agencies, these factors can lead to your condo being considered as non-warrantable:

  • Outstanding legal issues with the property. This can come from developers, a homeowners association or other entities.
  • Owned by a single organization. If more than 10% of the total units within the condo complex are owned by a single organization or person, it can be considered as non-warrantable.
  • The condo is still in the construction phase or has not been completely finished.
  • Units are available for short term rent.

Governing bodies may add to or remove condos on this list. If they deem the development suitable, you will still have to meet further conditions in order to receive a loan. The criteria can include:

  • Meeting FHA standards.
  • Buying a unit within a complex that is at least 70% sold.
  • Purchasing a condo in a complex that is at least 50% owner occupied.

Tips On Receiving Financing For A Condo

Learn about Freddie Mac and Fannie Mae’s published guidelines on condominium project requirements with the help of your mortgage broker, before going house shopping. 

They’ll guide you to the right type of property and loan for you. As well as helping you understand the differences in financing and loan terms.

Keep in mind that receiving a mortgage for a condo comes in two steps. Finding a lender willing to make the loan, and finding a condo that qualifies. 

If you are really in love with a non-warrantable condo then you may be able to get them approved. You may be able to convince them to invest the time and money required to get approved or renew their approval. This isn’t common, but it is possible. 

Once you’ve found a condo you’re interested in, have them complete a condo questionnaire in advance. This will help to determine if the property is warrantable or not.

While there may be little warrantable inventory in some areas, Seattle and its surrounding areas has its fair share. Or you may discover that a single family home or townhome is actually cheaper and easier to finance than you thought. 


Condos can be very attractive housing options for many buyers. They can come with some quirks. Both in daily living and dealing with the association, as well as financing. 

It may be for you. If you are set on a condo you should be sure to speak with a mortgage broker in advance. This will save you a lot of time and stress in your home and loan search. 

Find out the differences in loan programs, down payments and terms, and then find the ideal place to call home next. 

If you are ready to acquire a condo in Seattle, get in touch with our expert team today and we will be happy to help with financing. 

About the Author

Helping Seattleites buy their dream homes for over 15 years. Founder of Seattle's Mortgage Broker and author of Homeownership Simplified: The Truth about ZERO Down.