If you are purchasing a condominium and looking for conventional financing, your lender will need to reach out to the HOA to request completion of a Questionnaire. The answers to these questions determine if the project is warrantable or non-warrantable.
If the condo project is warrantable then it is eligible for conventional financing, however, if the condo project is non-warrantable, then a portfolio loan will be required.
Below are some of the common reasons that a project can be determined as non-warrantable.
- The project is managed or operated as a hotel
- The project is under litigation
- The project allows for timeshares
- There is one individual or one entity that owns more than 10% of the units
- The total square footage used for commercial or non-residential purposes exceeds 25%
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