"Non-warrantable" is lender shorthand, not a Fannie Mae or Freddie Mac term, for a condo project that does not meet Fannie Mae's project eligibility requirements; the agency guides instead list ineligible projects, Fannie Mae will not purchase loans on units in them, and some non-QM programs accept such projects with tighter limits. Fannie Mae's ineligible list includes hotel-style operation, timeshare ownership, commercial space above 35%, certain pending litigation, single-entity ownership above set limits and projects needing critical repairs. Freddie Mac has a similar ineligible list but lets authorized Sellers request a project waiver for some issues in established projects. For example, The Loan Store's Flex NQM Income guidelines cap non-warrantable condo loans at 80% LTV/CLTV for purchases, and UWM and Cake may accept projects that miss specific Fannie Mae tests such as the commercial-space limit.
Fannie Mae (conventional)
- Fannie Mae will not purchase loans on units in condo or co-op projects with ineligible characteristics, and projects shown as "Unavailable" in Condo Project Manager are ineligible; a lender may request an exception for a project it believes has merit. Fannie Mae B4-2.1-03
- Ineligible characteristics include timeshare, fractional or segmented ownership, and projects managed and operated as a hotel or motel even though the units are individually owned. Fannie Mae B4-2.1-03
- Also ineligible: nonresidential or commercial space above 35% of the total space, and non-incidental business operations owned or operated by the HOA, such as a restaurant, spa or health club. Fannie Mae B4-2.1-03
- Also ineligible: pending litigation naming the HOA or co-op corporation, or naming the sponsor or developer and relating to the project's safety, structural soundness, habitability or functional use; minor litigation meeting listed criteria is allowed. Fannie Mae B4-2.1-03
- Also ineligible: single-entity ownership of more than 2 units in projects of 11 to 20 units (or 5 to 10 units in a master association) or more than 20% of projects of 21 or more units, and projects needing critical repairs. Fannie Mae B4-2.1-03
- Project review is waived for detached units, units in two- to four-unit projects, and five- to ten-unit projects not in a larger development or master association; the project still must not be "Unavailable" in Condo Project Manager or a condo hotel, houseboat or timeshare project. Fannie Mae B4-2.1-02
Freddie Mac (conventional)
- Units in projects on Freddie Mac's ineligible list are not eligible for sale, except under Exempt From Review or a Project Certified PAR finding; the list includes Condominium Hotels or transient housing, timeshare projects, excessive commercial space, litigation and excessive single investor concentration. Freddie Mac 5701.3
- Authorized Sellers may submit a Project Waiver Request in Condo Project Advisor for an Established Condominium Project that misses certain requirements, including delinquent assessments, excessive commercial space, leased amenities or pending litigation. Freddie Mac 5701.11
Lender examples (non-QM)
- The Loan Store's Flex NQM Income guidelines allow non-warrantable condo projects with a full project review, up to 80% LTV/CLTV for purchase and rate/term and 70% CLTV for cash-out, with a 680 minimum FICO. The Loan Store Flex NQM Income Guidelines
- UWM's Bank Statement Blue guidelines say a condo that does not meet Fannie Mae warrantable project eligibility may be eligible as non-warrantable if only one listed option is met, such as commercial space or single-entity ownership not exceeding 50%. UWM Bank Statement Blue Guidelines
- Cake's Non-QM loan eligibility guidelines make non-warrantable condos eligible under listed criteria, including a 100% residential subject unit and commercial space under 50% of the building project; LTV limits are in its credit matrix. Cake NQM 5.0 Guidelines 9.11.2
Sources
- Fannie Mae Selling Guide, September 2, 2026 version: B4-2.1-03, Ineligible Projects (p. 645, 646, 647, 648); B4-2.1-03, Ineligible Projects (Litigation or Pre-litigation Activity) (p. 654); B4-2.1-02, Waiver of Project Review (p. 642, 643); B4-2.1-02, Requirements that Apply When the Project Review is Waived (p. 643)
- Freddie Mac Single-Family Seller/Servicer Guide, September 16, 2026 version: 5701.3, Ineligible projects (p. 5701-9); 5701.11, Condo Project Advisor – Project Waiver Request (PWR) (p. 5701-62); 5701.11(a)(ii), Project eligibility categories (p. 5701-63)
- The Loan Store Flex NQM Income Guidelines, November 21, 2025 version: Non-Warrantable Condominium Projects (Full Project Review Required) (p. 96)
- UWM Bank Statement Blue Guidelines, September 16, 2026 version: Non-Warrantable Condos (PDF p. 36)
- Cake Non-QM 5.0 Guidelines, September 30, 2026 version: 9.11.2 Non-Warrantable Condominium Projects (p. 36)
Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.
