Clearing HOA Warrantability Conditions in Underwriting
HOA questionnaire conditions arise when the condo project's ownership ratios, delinquency rates, litigation status, or financial health don't meet agency r
What Is This Condition?
- The HOA questionnaire collects data on owner-occupancy, investor concentration, pending litigation, delinquency rates, and HOA financial health. Any adverse answer may trigger a non-warrantable designation.
The HOA questionnaire collects data on owner-occupancy, investor concentration, pending litigation, delinquency rates, and HOA financial health. Any adverse answer may trigger a non-warrantable designation.
How to Clear This Condition
- 01Identify specific warrantability issue
- 02Research exception options
- 03Locate portfolio or Non-QM lender if truly non-warrantable
- 04Present options to LO
- 05Resubmit or switch lender
Documents Required to Clear This Condition
- HOA questionnaire showing resolution of adverse item
- Updated financials if financial health was the issue
- Condo project approval from FNMA/FHLMC
- Evidence litigation is disclosed and covered by insurance
- Alternative lender approval if non-warrantable
How CTC Handles This Condition
When CTC identifies a warrantability issue, we immediately identify alternative investors who will accept the project. Wasting 2–3 weeks processing through a lender who will deny a non-warrantable condo is avoidable.
Frequently Asked Questions
What is condo warrantability?
A 'warrantable' condo meets FNMA/FHLMC guidelines. Non-warrantable condos require portfolio or Non-QM financing at higher rates.
What makes a condo non-warrantable?
Investor units exceeding 35%, pending litigation, HOA delinquency above 15%, single entity owning more than 10% of units, or hotel-style short-term rental management.
Can I still get a mortgage on a non-warrantable condo?
Yes — portfolio lenders and Non-QM investors actively lend on non-warrantable condos. Rates are typically 0.25–0.75% higher with 10–20% minimum down payment.