Non-warrantable condo loan · California · Investment property
A non warrantable condo loan prices the building’s problem. Find the problem first.
Meanwhile, portfolio lenders will finance a project the agencies will not. What they price in is the cause — and if that cause is curable, you are paying a premium you did not have to pay.
Reviewed 13 September 2026 · Wexmoor Circle LLC, Los Angeles
1 · The mechanism
A non-warrantable condo loan stays on the lender’s book, so the lender sets the rules.
An agency loan moves on to Fannie Mae. So it has to meet published conditions. But a non-warrantable project fails one of those. So the loan stays on the lender’s own book. And a loan nobody will buy carries the price of holding it.
And that is the whole of it. No separate product called a non-warrantable condo loan exists. Instead a portfolio loan covers a project the agencies will not buy. Each lender writes its own rules. So two lenders can reach different answers on the same building.
In California these usually take the form of DSCR loans. That means the rent against the payment qualifies the file, not your personal income. So two separate tests have to pass: the project has to be acceptable to that lender, and the ratio has to clear.
Notably, most declines happen on the first test, and most attention goes to the second. The twenty rules that make a project non-warrantable sets out which test is which. Owners arrive worried about the ratio. Then the building stops them.
Premium
2 · What is being priced
The cause is the price. Not the label.
“Non-warrantable” covers causes two months from fixed. It also covers causes that never change. So a lender prices which of those you have, whether or not anyone says it out loud.
| The cause | Curable? | What it should mean for you |
|---|---|---|
| Single-entity ownership over the cap | Yes — one sale | Ask before you lock a long prepayment penalty |
| Insurance under the thresholds | Yes — at renewal | A renewal date is a refinance date |
| Litigation outside safety and soundness | Often — by letter | Worth the association’s counsel writing it down |
| Funded, scheduled repairs | Yes — on completion | Time the loan to the works, not the other way round |
| Commercial space over 35% | No | Permanent. It belongs in the purchase price |
| Hotel operation, timeshare, fractional | No | Permanent. Same |
So this is the whole argument for reading the documents first. Say the cause is curable. Then you want a loan you can exit cheaply: a shorter term, a softer prepayment penalty. After all, you intend to refinance into agency pricing once the project clears.
However, a permanent cause flips that. Then you want the longest fixed period you can get. After all, no cheaper loan is waiting for you later. The same building, the same borrower, and two opposite right answers. The only thing that separates them is knowing the cause.
3 · The file
What a non warrantable condo loan file actually contains.
So there are two stacks. One about the project, one about the deal. The project stack is the one that decides it, and it is the one borrowers do not expect.
The four project documents
Namely: budget, reserve study, twelve months of minutes, insurance certificate. Ask the association for them. They cost nothing, and they come before anyone orders an appraisal.
The rent
A signed lease, or the appraiser’s market rent. And on a condo the dues sit inside the payment, so they move the ratio directly.
The entity
Most borrowers close in an LLC and sign a personal guarantee. Formation documents and the ownership chain behind it.
Deposit and reserves
Generally more than an agency loan expects, and count reserves after the deposit leaves, not before.
The property
Non-owner-occupied, business purpose. One to ten units is our boundary; a primary residence is a different product under different rules.
Credit
Both a gate and a price input. It will not rescue a project problem. Nothing else will either.
4 · The number you came for
We do not publish non warrantable condo rates, and here is the honest reason.
A rate on a page belongs to somebody else’s file. On this product it belongs to somebody else’s building, which is a bigger gap.
Pricing here moves on the project as much as on the borrower. Take two files with the same credit, deposit and rent. They can still price differently, because one building carries a litigation line. A published range would be accurate for neither.
What can be said plainly: it prices above an agency loan, because the lender keeps it. How far above depends on the cause, the deposit and the ratio — and the first of those three is the one you can still change.
So the useful order is: name the cause, then ask for pricing. Asking for a quote first gets you a number attached to an assumption nobody has tested.
We read project documents and name the rule.
5 · The questions
What we are asked most, answered short.
Each answer stands on its own. Take the one you came for.
Is a non-warrantable condo loan harder to get?
Not harder on you. Harder on the building. and the warrantable comparison sets out why the label says so little. A lender weighs your credit and income the same way. The extra test asks whether it will hold a loan on that project.
How much deposit will I need?
More than an agency loan asks for, and the exact figure moves with the project and the ratio. We will not print one, because it would be a number for a different building.
Can I refinance out later?
Only if the cause is curable. That is precisely why it is worth naming before you sign a long prepayment penalty, and why the buy-or-not decision turns on the same fact.
Do different lenders disagree?
Yes, and most often on litigation and on whether an insurance policy is sufficient. One decline is not every decline. Still, on structural causes it usually is.
Is a non-warrantable condo loan a DSCR loan?
On investment property, usually. The rent against the payment qualifies it, and the project test sits alongside.
Can you check the building before I apply?
Yes, since that is the whole point. Four documents, read first, and you know which test you are actually facing.
6 · Next
Name the cause before you price a non-warrantable condo loan.
A curable cause and a permanent one need opposite loan structures. Nothing else about the file changes that.
Wexmoor Circle LLC · 930 Colorado Blvd, Suite 1, Los Angeles, CA 90041 · Reviewed 13 September 2026
