What kinds of condo issues make financing harder (warrantability, HOA, etc.)?

What condo issues make financing harder?

You want to know what condo features make financing more challenging with conventional loans. Several factors can create hurdles during the approval process.

Lenders check whether the condo complex meets warrantability standards—requirements that protect their investment. Common issues include high investor ownership (over 50% typically), ongoing litigation against the HOA, deferred maintenance, or commercial space taking up too much of the building. The HOA's financial health matters too: lenders review reserve funds, delinquency rates, and whether the association carries adequate insurance.

You can check the condo's warrantability status before making an offer. Ask your real estate agent for HOA documents, including budgets, meeting minutes, and any pending legal issues. The property management company can often tell you if the complex has been approved by major lenders recently.

If warrantability becomes an issue, you have several paths. Some lenders offer portfolio loans that don't follow the same guidelines. FHA loans have different condo requirements that might work better. You can also wait to see if the HOA resolves the issues that created the problem.

Share these concerns with your lender early in the process and they can walk you through the specific requirements for your target property.