A straight answer
My condo won't qualify. Can I still buy it?
The direct answer
Possibly. When a condo is called non-warrantable, the problem is usually the project rather than your personal loan approval. I first find out why the building failed. I'm Zach von der Linden (NMLS 1652805), a mortgage broker with West Capital Lending, based in San Clemente.
Fannie Mae and Freddie Mac project rules decide which condo loans they buy. If the building fails their review, I'd check whether a lender I work with offers financing for that building instead of giving up on the purchase. I work with buyers in California, Utah, Oregon and Arizona.
Zach von der Linden, mortgage broker and Branch Manager, West Capital Lending · NMLS 1652805
Wholesale pricing · California, Utah, Oregon and Arizona
5.0 across 66 reviews on Experience.com (read on 2026-09-24) · Text reaches Zach directly · Last updated 2026-10-18
Told the condo won't qualify? Text me the address and what failed.
No credit pull happens from a text or a call. Texts and calls go to Zach's cell.
What happens after you text me?
Texts go straight to my cell, and I answer them myself when I'm free. I'll ask for the few details that actually matter, tell you whether the structure looks worth pursuing, and explain the next step. If I don't think the loan fits, I'll tell you that too.
A text or phone conversation does not pull your credit.
What does "non-warrantable condo" mean?
Non-warrantable is industry shorthand for a unit in a project that does not meet the project standards for the conventional financing being considered. Fannie Mae's review can involve the association's budget, reserves, insurance, litigation, delinquent dues, how many units one owner holds, commercial use and the physical condition of the buildings. Your own income and credit are a separate part of the loan review.
Why did my condo building qualify before but fail now?
Condo review changed in 2026. Fannie Mae retired its Limited Review process for loan applications dated on or after August 3, 2026, and Freddie Mac retired its Streamlined Review for applications received on or after the same date. Attached units in established projects that used to get the lighter review now get a Full Review, which can surface reserve, insurance, litigation or maintenance issues the lighter review did not look at the same way. Small projects and detached units follow their own rules.
What are the most common reasons a condo fails review?
I usually start with reserves, delinquent HOA dues, litigation, unresolved critical repairs, special assessments, master insurance, commercial space and too many units owned by one entity. A project run like a hotel is also ineligible for Fannie Mae.
A special assessment by itself does not make the project ineligible; what it pays for matters. If it is tied to a critical repair that has not been fixed, the project is ineligible until the repair is addressed.
The other condo financing problems page walks through each of these, with the agency rule behind it.
Can I still finance a non-warrantable condo?
Sometimes. Fannie Mae's project rules decide which loans Fannie Mae will buy, and a loan that is not sold to Fannie Mae or Freddie Mac does not have to meet them. So I'd check whether a lender I work with offers financing for your building, based on why it failed. Serious structural or safety problems, and a building run like a hotel, can still stop a loan, so I don't promise an answer before I've seen the project documents.
What should I ask the HOA for before I write an offer?
Before I rely on a condo being financeable, I want to know what the HOA documents will show. Useful items include the current budget, reserve information or a reserve study, the master insurance policy, recent meeting minutes, any pending litigation, any special assessments, and any structural or inspection reports. Getting those questions answered early keeps the project review from becoming a surprise during escrow.
Need a pre-approval letter too? Get pre-approved, and tell me the condo address so I can look at the project at the same time.
Buying a non-warrantable condo in San Clemente
Much of the housing near the San Clemente pier is apartments and condominiums mixed in with commercial uses, by the city's Pier Bowl Specific Plan, so a mixed-use building's commercial share is a common project objection here, alongside reserves, insurance and litigation. In 2026 owners at one San Clemente condominium community received an emergency assessment for new roofs, as ABC7 and Patch reported; an assessment tied to a critical repair that has not been fixed makes the project ineligible for Fannie Mae until the repair is addressed. California's balcony inspection law, Civil Code section 5551, requires inspections of exterior elevated elements in buildings with three or more attached units, and the repairs that follow can lead to assessments.
What I ask the HOA for on a San Clemente building before you write the offer: the current budget and any reserve study, the master insurance policy, recent minutes, pending litigation, any special assessment and what it pays for, and any inspection or structural report. My San Clemente condo got a special assessment. How do I pay it? covers the law and the options, and condo loans on the San Clemente page covers the rest of the local file.
What changes again in January 2027?
Fannie Mae Full Review asks for a budget that puts at least 10% of the annual budgeted assessment income toward replacement reserves, and for loan applications dated on or after January 4, 2027, that minimum becomes 15%. Freddie Mac made the same change. If an acceptable reserve study is used instead, the budget must include the highest recommended reserve allocation in the study, and Freddie Mac says that amount must not be based on a baseline funding method. Buildings that pass today on reserves may not pass in January, so I ask for the budget early.
Could FHA or VA still work if conventional financing does not?
It depends on the project and the loan. FHA insures condo loans in FHA-approved projects, and in some projects that are not approved but meet its Single-Unit Approval requirements. VA requires the condo project to be approved by VA. I check HUD's condo search and VA's condo report before assuming either one solves a conventional problem.
Questions people ask next
Does non-warrantable mean the condo is unsafe?
No. A building can fail on a budget, insurance or ownership rule without being unsafe. Structural problems and unfixed critical repairs are a separate and more serious category.
Can a special assessment make a condo non-warrantable?
It can when it is tied to a critical repair that has not been fixed. A special assessment on its own is not disqualifying; the lender reviews what it is for, the amount still to be collected and when it will be paid off.
Can litigation make a condo non-warrantable?
Yes. Under Fannie Mae's rules, litigation about the safety, structural soundness, habitability or functional use of the project makes it ineligible, and arbitration or mediation that is expected to go forward counts too. Some minor matters are treated differently.
Can the condo become non-warrantable while I am already in escrow?
It can. The review reads the project as it stands, and new litigation, an updated budget or a repair finding can change the result. That's one reason I ask for the HOA documents early.
Does a low HOA reserve balance automatically fail the project?
Not necessarily. Fannie Mae's test looks at how much of the budget goes to reserves, or at an acceptable reserve study, rather than only the cash sitting in one account.
What clients say
Zach was so easy to work with. He made a stressful situation into a very positive experience for us and did push us one way or another. He listened to what we hoped we could accomplish and made it happen.
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Sources and checked dates
Sources: Fannie Mae, Lender Letter LL-2026-03 (checked 2026-10-07) · Freddie Mac, Single-Family Seller/Servicer Guide Bulletin 2026-C (checked 2026-10-07) · Fannie Mae Selling Guide, B4-2.2-01, Full Review Process (checked 2026-10-07) · Fannie Mae Selling Guide, B4-2.1-03, Ineligible Projects (checked 2026-10-07) · Fannie Mae selling guide, B4-2.1-01, General Information on Project Standards (checked 2026-09-26) · HUD, FHA Condominiums (checked 2026-10-07) · VA Loan Guaranty, Condo Approval for Lenders (quick reference) (checked 2026-10-07) · City of San Clemente, Pier Bowl Specific Plan (December 2019) (checked 2026-09-26) · ABC7 Los Angeles, San Clemente condo owners and an emergency roof assessment (September 1, 2026); Patch Orange County (August 31, 2026) (checked 2026-09-26) · California Civil Code 5551 (checked 2026-09-26).
Show each claim on this page, what it depends on, and the date it was checked (12)
| What we say, and what it depends on | Source | Checked |
|---|---|---|
| Fannie Mae Lender Letter LL-2026-03: Fannie Mae is retiring the Limited Review process; lenders may implement the retirement immediately but must do so for all loan applications dated on or after August 3, 2026. | Fannie Mae, Lender Letter LL-2026-03 | 2026-10-07 |
| Freddie Mac Bulletin 2026-C: the Streamlined Review project review type is retired for mortgages with application received dates on or after August 3, 2026; the reserve allocation for capital expenditures and deferred maintenance increases from a minimum of 10% to a minimum of 15% of the annual budgeted assessment income for application received dates on or after January 4, 2027; and a seller with an unexpired project review completed before those dates must still confirm the project complies with the new requirements for applications received on or after them. | Freddie Mac, Single-Family Seller/Servicer Guide Bulletin 2026-C | 2026-10-07 |
| Fannie Mae Selling Guide B4-2.2-01: the project budget must provide for the funding of replacement reserves for capital expenditures and deferred maintenance that is at least 10% of the budget, calculated by dividing the annual budgeted replacement reserve allocation by the association's annual budgeted assessment income; a lender may use an acceptable reserve study instead, and the budget must include the highest recommended reserve allocation amount in that study. No more than 15% of the total units may be 60 days or more past due on common expense assessments. | Fannie Mae Selling Guide, B4-2.2-01, Full Review Process | 2026-10-07 |
| Fannie Mae Lender Letter LL-2026-03: for the Full Review process, the minimum replacement reserve allocation becomes 15% of the annual budgeted assessment income for loan applications dated on or after January 4, 2027; when a reserve study is used instead, the budget must include the highest recommended reserve allocation amount in the study. | Fannie Mae, Lender Letter LL-2026-03 | 2026-10-07 |
| Fannie Mae Selling Guide B4-2.1-03 lists ineligible project characteristics, including: pending litigation that relates to the safety, structural soundness, habitability, or functional use of the project (pre-litigation such as arbitration or mediation reasonably expected to proceed is treated the same way, and some minor litigation is eligible); projects in need of critical repairs; nonresidential or commercial space above 35%; projects operated as hotels or motels; and single-entity ownership above 2 units in projects with 5 to 10 units that are part of a master association, 2 units in projects with 11 to 20 units, and 20% in projects with 21 or more units. | Fannie Mae Selling Guide, B4-2.1-03, Ineligible Projects | 2026-10-07 |
| Fannie Mae Selling Guide B4-2.1-03: for each current or planned special assessment, the lender must review its purpose, when it was approved, its original amount and the remaining amount to be collected, and the expected payoff date. "If the special assessment is associated with a critical repair and the issue is not remediated, the project is ineligible." Routine repairs funded through special assessments within guidelines are not considered critical. | Fannie Mae Selling Guide, B4-2.1-03, Ineligible Projects | 2026-10-07 |
| Fannie Mae’s selling guide, section B4-2.1-01, says: “Before delivering a loan secured by an individual unit in a project, the lender must determine that the project meets Fannie Mae’s eligibility requirements,” and that project documentation “may include, but is not limited to, the following: legal and recorded documents... project budgets, financial statements, and reserve studies.” | Fannie Mae selling guide, B4-2.1-01, General Information on Project Standards | 2026-09-26 |
| HUD: FHA insures condominium loans to purchase or refinance a unit in an FHA-approved condominium project or in a project that is not FHA-approved but meets the Single-Unit Approval requirements. HUD publishes a search for FHA-approved condominium projects. | HUD, FHA Condominiums | 2026-10-07 |
| VA: "In order to be eligible for VA loan guaranty, a condominium or lot must be approved by VA." VA publishes a condo report search on its LGY Hub. | VA Loan Guaranty, Condo Approval for Lenders (quick reference) | 2026-10-07 |
| The City’s Pier Bowl Specific Plan (December 2019 update) says “The Pier Bowl Specific Plan area is entirely located within the coastal zone,” that “the predominant uses in the area are residential apartments, condominiums, and homes that are mixed within and around the commercial uses,” that the Pier Bowl “includes several landmark and historic structures,” and that “until IP certification, this Specific Plan and the Zoning Ordinance function as implementation plans for the Pier Bowl area.” | City of San Clemente, Pier Bowl Specific Plan (December 2019) | 2026-09-26 |
| ABC7 (September 1, 2026) and Patch (August 31, 2026) reported that owners at a San Clemente condominium community received an emergency assessment for new roofs; that the association offered owners the choice of paying in full, splitting the amount into two payments, or adding an amount to their monthly payment for a period; that owners said the association had threatened liens for non-payment; that owners were seeking to recall board members and had filed a claim alleging the board violated the law; and that an attorney quoted in the report said owners have to pay an assessment and then dispute it. | ABC7 Los Angeles, San Clemente condo owners and an emergency roof assessment (September 1, 2026); Patch Orange County (August 31, 2026) | 2026-09-26 |
| California Civil Code 5551 (the balcony inspection law known as SB 326): “At least once every nine years, the board of an association of a condominium project shall cause a reasonably competent and diligent visual inspection to be conducted by a licensed structural or civil engineer or architect of a random and statistically significant sample of exterior elevated elements for which the association has maintenance or repair responsibility.” “The first inspection shall be completed by January 1, 2025, and then every nine years thereafter.” If an element “poses an immediate threat to the safety of the occupants,” the inspector reports it to the association immediately and to the local code enforcement agency within 15 days. “This section shall only apply to buildings containing three or more attached multifamily dwelling units.” | California Civil Code 5551 | 2026-09-26 |
Written for and accountable to: Zach von der Linden, Mortgage broker and Branch Manager, West Capital Lending.
Last updated 2026-10-18.
Verify him: NMLS Consumer Access, ID 1652805 · 66 reviews on Experience.com.
Sources for product claims are listed on this page, with the date each was checked.
Text Zach about the condo
Send me the property address and what you were told failed. I'll start with the project problem before we change the entire loan.
No credit pull happens from a conversation. Texts go to Zach's cell.