A non-warrantable condo is a unit in a condo building that does not meet Fannie Mae's (or Freddie Mac's) project rules, so standard conventional loans cannot be used. Common reasons include the building operating like a hotel, more than 35% commercial space, one owner holding too many units, pending litigation about safety or structure, or major repairs. FHA loans need the building on FHA's approved list or a single-unit approval. Buyers can often still finance these condos with portfolio or non-QM loans, usually with a bigger down payment and a higher rate. Terms vary by lender.
Downtown Nashville, the Gulch, and Midtown have many condo buildings. Some have shops on the ground floor, rental programs, or hotel-style services. Those features can make a building non-warrantable. The unit can be beautiful and still not fit a standard loan.
| Reason | Fannie Mae rule |
|---|---|
| Runs like a hotel or condotel | Not eligible (for example, rental pools, hotel services, or hotel licensing) |
| Too much commercial space | Nonresidential space may not exceed 35% |
| One owner holds many units | In projects with 21+ units, one entity may not own more than 20% |
| Litigation | Not eligible if the HOA is in pending litigation about safety, structure, or use (some exceptions) |
| Critical repairs | Not eligible if the project needs critical repairs |
| Timeshare or split ownership | Not eligible |
For FHA, the building must be on FHA's approved condo list, or the unit must get a single-unit approval. You can search FHA-approved projects on HUD's website. VA keeps its own list of approved condos.
Terms vary by lender. Non-QM loans are not set by a government agency. Each lender writes its own rules for credit, down payment, rates, and paperwork, and those rules change often. Always ask for the lender’s current guidelines in writing.
Tip: Ask your agent to get the condo questionnaire early, before your inspection period ends.
It means the condo building does not meet Fannie Mae or Freddie Mac project rules, so a standard conventional loan cannot be used.
Common reasons are hotel-style rentals, more than 35% commercial space, one owner holding too many units, pending litigation, or major repairs.
Yes, if the building is FHA approved or the unit gets FHA single-unit approval.
Often, yes. Many portfolio and non-QM lenders will look at them, usually with more down and a higher rate. Terms vary by lender.
Your lender reviews the building, often with a condo questionnaire from the HOA. Start early.
No. Buildings that run like hotels are not eligible for Fannie Mae. They usually need special financing.
Looking at a condo in downtown Nashville, the Gulch, or Midtown? Call me at (615) 495-6594, email travis@heathrowmtg.com, or start an application.
Checked October 11, 2026. A building's status can change. Check it for the exact unit you are buying. This is not a loan offer.
