Loan Requirements
For new construction condos, how many units are required to be under contract to close the loan case
The pre-sale requirement for new construction condos is expressed as a percentage of total units — not a fixed unit count. The standard agency threshold is 50% conveyed or under contract, though lender-specific and non-warrantable programs may apply thresholds ranging from 30%–50%.
Agency Guideline Requirements (Fannie Mae)
- "At least 50% of the total units in the project or subject legal phase must have been conveyed or be under contract for sale to principal residence or second home purchasers."
- "For a specific legal phase or phases in a new project, at least 50% of the total units in the subject legal phase(s), considered together with all prior legal phases, must have been conveyed or be under contract for sale to principal residence or second home purchasers."
- Project or legal phase must be "substantially complete" — certificate of occupancy or equivalent must be issued.
- Individual units must be available for immediate occupancy at the time of loan closing.
- No more than one legal phase per building is permitted.
- Important context: Investor-purchased units do not count toward the presale threshold — only principal residence and second home purchasers qualify.
Lender-Specific Requirements
Standard 50% Threshold (Warrantable / Full Review)
- JMAC Lending (Newport DSCR — Non-Warrantable Expanded): "New Projects: The project or the subject's legal phase along with other phases must be complete. All common areas in the project must be 100% complete. A minimum of 50% of units must be sold or under contract."
- JMAC Lending (DSCR Prime — New or Newly Converted Projects): "50% of the total units in the project or subject's phase must be sold and conveyed to the unit owners AND at least 50% of the units must be owner occupied."
- JMAC Lending (Limited Doc — Non-Warrantable): "New Projects: The project or the subject's legal phase along with other phases must be complete. All common areas in the project must be 100% complete. A minimum of 50% of units must be sold or under contract."
- AmWest Funding (Advantage Program and Investor Advantage): "New Condominium: Minimum of 50% of units must be conveyed or under contract."
Reduced 40% Threshold
- JMAC Lending (Newport Non-Conforming): "New Projects: 40% of the total units in the project or subjects phase must be sold or conveyed to unit owners and at least 40% of the units must be owner occupied."
Reduced 30% Threshold (Most Flexible)
- New Wave Lending (Jumbo Plus — Non-Warrantable Condo): "Presale: New or converted projects must have at least 30% of units sold or under contract to owner occupants or second home purchasers for subject phase. Common areas/amenities must be complete for subject phase."
FHA New Construction — Owner Occupancy Standard
FHA does not apply a "units under contract" presale ratio in the same manner. Instead, it requires a minimum owner occupancy percentage:
- For Complete Condominium Projects and Gut Rehab conversions, the acceptable level of Owner Occupancy Percentage is at least 30 percent of the total number of declared Units in the Condominium Project.
- All units must have a certificate of occupancy and be ready for occupancy before FHA insurance endorsement.
Pre-Sale Threshold Summary
| Program / Lender | Minimum Pre-Sale Threshold | Additional Requirement |
|---|---|---|
| Fannie Mae (Agency) | 50% conveyed or under contract (principal residence / 2nd home only) | Immediate occupancy required at closing |
| JMAC — Newport DSCR (Non-Warrantable) | 50% sold or under contract | 100% common area completion |
| JMAC — DSCR Prime (New/Newly Converted) | 50% sold/conveyed | 50% must also be owner occupied |
| JMAC — Limited Doc (Non-Warrantable) | 50% sold or under contract | 100% common area completion |
| AmWest Funding — Advantage & Investor Advantage | 50% conveyed or under contract | Lender full review required |
| JMAC — Newport Non-Conforming | 40% sold or conveyed | 40% must be owner occupied |
| New Wave Lending — Jumbo Plus (Non-Warrantable) | 30% sold or under contract (owner occupants / 2nd home) | Common areas complete for subject phase |
| FHA (New Construction / Complete Projects) | 30% owner occupancy | Full CO required on all units |
Underwriting Decision Notes
- If the project falls below 50% pre-sale, evaluate whether a Non-Warrantable Condo product with a reduced threshold (40% JMAC Newport Non-Conforming or 30% New Wave Lending Jumbo Plus) is appropriate for the transaction.
- JMAC's DSCR Prime program carries a dual condition: 50% sold/conveyed and 50% owner occupied — both must be satisfied independently.
- New Wave Lending's 30% threshold is the most permissive option identified, but is limited to owner-occupant and second home purchasers only.
