If you are considering purchasing a condo, you must consider if the complex is warrantable – the property is eligible to be sold to Fannie Mae or Feddie Mac, in other words, whether the property qualifies for regular conventional financing. Loans not saleable to FNMA (non-conforming) are considered riskier, typically with higher loan rates and larger down payment requirements.

There are several criteria to determine if a condo is warrantable. For example, high investor ownership (over 51% of units or over 10% for single entities) will make the complex non-warrantable. Some condo projects have already been approved by FNMA as warrantable. If the complex does not appear on an approved list, a questionnaire will be required that must be completed by the condo management to determine if the warrantable criteria is satisfied.