Mortgage  Question?
Options to Refinance Mortgage on Non-Warrantable Condo

What are my options to refinance a mortgage on a condo in a building that is less than 50% owner occupied?

Harry Jensen
, Trusted Mortgage Expert with 45+ Years of Experience
Edited by Michael Jensen

To qualify for a standard mortgage on a condo, whether it is for a refinance or a purchase loan, the condo project must meet certain guidelines. The condo project must be approved by Fannie Mae, the FHA or the VA, which are organizations that determine the qualification requirements for conventional, FHA and VA mortgages. Condo projects that meet the requirements outlined by these organizations are classified as warrantable and are eligible for standard mortgages provided by traditional lenders.

One of the key requirements that a condominium project must meet to be approved is that at least 51% of the units must be lived in by the owner, or owner occupied. For example, if a condo development has 20 units, at least 11 units must be occupied by the property owner.

On the other hand, if condominium project is less than half owner occupied, the project is not approved and the development is designated as non-warrantable. You cannot qualify for a standard conventional or VA mortgage on a non-warrantable condo project.

Review How to Get a Mortgage on a Condo

If your condo project is not approved by Fannie Mae, the FHA or the VA, your best option is to see if you qualify for an FHA mortgage.  New guidelines, which go into effect October 15, 2019, allow you to qualify for an FHA mortgage on condo in a project that is not approved by the FHA. 

Before this policy was adopted, you could not use an FHA mortgage to obtain financing for a condo in a project that was non-approved. The new regulations allow you to qualify for a refinance using spot approval, also called single-unit approval, which means you can use the FHA program to refinance the mortgage on an individual condo in a non-approved project.

To qualify for an FHA mortgage on a condo in a non-approved project, construction on the project must be finished and a maximum of 10% of the condos in the project can have an FHA loan (developments with less than 10 units can have no more than two condos with an FHA mortgage).

Other benefits of using the FHA program to refinance a condo mortgage include more flexible qualification requirements and a lower mortgage rate as compared to a conventional loan.  The downsides of an FHA mortgage include loan limits and paying an upfront and ongoing mortgage insurance premium, which increase your closing fees and monthly payment. 

The table below shows FHA refinance rates and closing costs for lenders near you.  We recommend that you shop multiple lenders to find the best refinance loan terms.

Current FHA Mortgage Rates in Ashburn, Virginia as of May 17, 2024
View All Lenders


Rate data provided by Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes, insurance premiums or private mortgage insurance if applicable. Actual payments will be greater with taxes and insurance included. Read through our lender table disclaimer for more information on rates and product details.

This does not mean you cannot refinance your mortgage, but you need to find a lender that offers non-warrantable condo loans. Many traditional lenders do not provide non-warrantable condo loans because they involve additional risk and documentation.

Additionally, you are typically required to pay a higher mortgage rate and meet stricter qualification requirements to qualify for a non-warrantable condo mortgage. For example, you may need to have a higher credit score or more equity in your property to get approved for the refinance. Because of the increased risk associated with financing a non-approved condo unit, lenders may require more protection by applying a lower loan-to-value (LTV) ratio.

If you determine that your condo project is non-warrantable, our first recommendation is that you contact your homeowners association (or co-op board) to determine if anyone has recently refinanced their mortgage or bought a unit in your development. A lender that recently provided a mortgage for a condo in your building may be more willing to refinance your mortgage at acceptable terms.

If there is no recent financing activity in your project, a relatively small number of lenders offer non-warrantable condo loans and your best options are likely mortgage brokers or private money lenders. You can use the FREEandCLEAR Lender Directory to search over 3,900 lenders by lender type and location. For example, you can find mortgage brokers and private money lenders in your state and determine if they provide non-warrantable condo mortgages.


Mortgage brokers work with a network of lenders that offer a range of loan programs. This enables mortgage brokers to provide a wider selection of loan programs potentially including non-warrantable condo loans.

Private money lenders, also known as hard money lenders, offer non-traditional mortgage programs but charge significantly higher interest rates and closing costs. In short, private money lenders offer financing alternatives if you cannot qualify for a mortgage with a traditional lender such as a bank, mortgage broker or credit union. Many private money lenders offer non-warrantable condo loans.

Review How a Private Money Mortgage Works

If you apply for a private money mortgage be sure to fully understand the significantly higher rate, fees and possible prepayment penalty, charged by the lender. If possible, we recommend that you refinance a private money loan with a traditional mortgage as soon as possible.


"Condo, Co-Op, and PUD Eligibility."  Originating & Underwriting.  Fannie Mae, 2019.  Web.

« Return to Q&A Home
About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

Harry Jensen LinkedInLinkedIn | Email Harry JensenEmail