The Quick Read: Packaging the appraisal means finishing the project review before the appraiser sees the unit, then handing over the HOA documents and building sales history together as one indexed file. The appraisal only sets the value. The lender’s separate project review decides whether the building is acceptable collateral.
- Warrantability is a building-level label, not a flaw in your unit or your credit.
- Order the HOA questionnaire and document package before the appraisal, not after.
- Comparable sales from inside the building usually carry the most weight, so build that list early.
- Dues belong in the monthly obligation, so heavy dues can sink an otherwise strong rent.
- Figures here are typical, through select wholesale programs, subject to full underwriting.
A jumbo buyer with a self-employed income often assumes strong deposits and good credit will carry the file. They help. They do not fix a building problem.
Key Terms Defined
Warrantable condo. A condo project that meets the agency standards for building and HOA health, so the loan can be sold to the agencies.
Non-warrantable condo. A project that fails one or more of those standards, so it needs a portfolio or non-QM loan instead.
HOA questionnaire. A form the HOA or its manager completes, covering litigation, delinquent dues, investor share, reserves and insurance.
Project review. The lender’s own look at the building, separate from the appraisal of your unit.
Comparable sale (comp). A recent closed sale of a similar unit, used to support the appraised value.
Reconsideration of value. A written request asking the appraiser to revisit a value, backed by better sales evidence.
What Does Non-Warrantable Actually Mean?
It is a classification of the project, meaning the building and its HOA. Your unit can be flawless and the building can still fail.
Common triggers include a high share of investor-owned units, thin reserves, active litigation, unit owners behind on dues, and hotel-style operation. Unfinished phases and inadequate master insurance show up too.
A jumbo loan is simply a loan above the agency conforming limit, so agency buyers are out of the picture regardless of the condo. That means the lender writes its own project rules. Across our wholesale network, those rules differ from lender to lender. Strong credit does not cure a project-level problem, and a lender can still decline a building that looks too risky.
Step One: Settle the Project Facts Before You Order the Appraisal
Start with the questionnaire. A non-warrantable finding often surfaces here, not at the appraisal, and a market source warns that surprises can land late in the process. A clean appraisal followed by a failed questionnaire wastes time and money.
Ask the HOA or its manager to complete the questionnaire fully. Then collect the rest of the package that lenders typically want:
- The current budget and recent financial statements
- Reserve information or a reserve study
- The master insurance certificate
- Governing documents and recent meeting minutes
- Disclosures on litigation and special assessments
Check these documents against each other before submitting anything. If the questionnaire says no litigation but the minutes discuss a lawsuit, resolve it now. A blank or an answer of unknown invites questions. A false answer is worse: wrong answers on that form can amount to mortgage fraud, so never guess.
Step Two: Order the Right Appraisal and Brief the Appraiser
Condo units are normally valued on the individual unit report, Fannie Mae Form 1073. The form asks about project occupancy (principal residence, second home or tenant), whether the developer still controls the HOA, and unit charges. Using the form does not make your loan an agency loan. It is just the standard format for describing a condo unit.
The appraiser reports project facts. The appraiser does not decide warrantability. That call belongs to the lender.
Give the appraiser a short cover note with the file. It should include:
- Project name and unit number
- HOA dues and any special assessments
- The leasing and short-term-rental policy
- The completed questionnaire and budget, so the project analysis matches what the underwriter sees
- The contract and any prior sales in the building
Matching the appraiser’s project data to the underwriter’s file prevents the re-underwriting that happens when two documents disagree.
Why Comps Decide the Value
Comparable sales are what move the number. An appraiser interviewed in New England Condominium magazine prefers same-building, same-line sales because fewer adjustments make a comp more reliable. The same piece says the cost approach is impractical for condo units.
Non-warrantable buildings often have thin sales history, which makes the comp search harder. Help the appraiser by supplying:
- Closed sales of similar units in the building, including rentals where useful
- Sales in comparable buildings nearby, with a short reason each one is a fair match
- Notes on floor level, view, parking and finishes, which drive the adjustments
Conventional review guidance typically asks for several closed comps within the past year. Jumbo and non-QM lenders may set their own comp rules, so confirm them before ordering. Do not assume a discount for non-warrantable status. Evidence on whether these units sell for less is mixed and varies building by building.
How Underwriting Reads the Whole File
The underwriter reconciles four things: the appraised value, the project risk on the questionnaire, the HOA dues, and insurance. Insurance means both the master policy and your own unit-owner policy.
Dues matter most on rental files. For a DSCR loan, the file is underwritten on unit-level rent and project collateral risk. Dues sit in the coverage denominator, so a unit with strong rent and heavy dues can still fall short of the coverage a program wants. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust. Our complete DSCR loans guide walks through how that ratio is built.
What the Program Numbers Look Like
For a jumbo file on a non-warrantable condo, a few network figures set the frame. Everything below is typical, through select wholesale programs, subject to full underwriting.
- Non-warrantable condos run to 80% leverage, against 85% for warrantable condos. Condotels sit at 75% on a purchase and 65% on a cash-out.
- Loan sizes run from $300,000 to $30,000,000 across two programs. A portfolio non-QM program carries files to $6,000,000. A bank portfolio program carries twelve-month-statement files to $30,000,000 on its own ladder.
- On an investment property, a purchase from $1,000,000 to $1,500,000 typically tops out at 80%, with credit of 680 or better for that leverage. From $2,000,000 to $2,500,000 it is also 80%, with credit near 720.
- On a primary residence, a purchase from $2,000,000 to $2,500,000 also tops out at 80%, with credit near 720.
- Reserves run 3 months to $500,000, 6 months to $1,500,000 and 9 months above.
- Above $4,000,000, every file is reviewed case by case before submission, including leverage.
Above $3,000,000 on an investment property or second home, and above $3,500,000 on a primary residence, super-jumbo overlays apply. These include a 700 credit floor and no rural property. Our piece How to Build a Tower Condo Appraisal Package for Super Jumbo DSCR covers that end of the range.
Two appraisals can apply on larger files, depending on the specific program. Ask your loan officer whether a second appraisal is required for your loan size and program, and prepare both packages the same way.
Where the General Rule Breaks
Condotels and hotel-style projects. These are inherently non-warrantable. They typically need condotel-specific comps and rental analysis, and the appraisal can be done differently from standard condo work. Confirm the program’s requirements before you order.
Fixable versus structural failures. A project that fails only on something the HOA can cure, such as delinquent dues, reserves, litigation or insurance, can be reclassified after a new review. It is not automatic. A condotel or a membership-required project stays non-warrantable.
Unfinished phases. These can graduate later, so confirm the project’s status when the loan is made, not when you first toured it.
Questionnaire shortcuts. You may hear that some lenders skip the questionnaire at a higher down payment. That is an old anecdote about conventional loans. It does not apply to jumbo or DSCR files.
Occupancy. A primary residence, a second home and an investment property each use their own leverage ladder. Never read one occupancy’s figure off another’s.
If the Value Comes Back Low
A low value is a comp problem more often than a building problem. Before you react, read the report for errors in the project data, such as dues, unit count or occupancy.
If the facts are wrong, request a reconsideration of value in writing. A credible request names specific closed sales, explains why each is a better match, and stays factual. Skip the emotional appeal.
If the comps are right and the value holds, you have three choices. Renegotiate the price, bring more cash to the closing, or walk. Walking is a legitimate outcome when the building’s finances are the real issue.
What the Investor Decision Looks Like
Run the decision in this order: building first, comps second, dues against rent third, leverage last. A building with high investor concentration or weak finances also carries exit risk. A warrantable condo can become non-warrantable later, which shrinks your pool of future buyers.
For cash-out on an owned unit, the numbers move again. Lendmire’s piece on how much a super jumbo cash-out releases on a non-warrantable condo covers that side.
For a high-net-worth borrower, the qualification path can run on bank statements: 12 or 24 months of deposits after an expense ratio, rather than traditional personal-income documentation. Qualification on that path is subject to lender guidelines and the property review above.
Pre-Submission Checklist
- Questionnaire complete, no blanks, no unknowns
- Budget, reserves, insurance, minutes and governing documents indexed
- Answers consistent across every document
- Cover note and building sales history delivered to the appraiser
- Comp list prepared, with reasons for any out-of-building sale
- Dues and insurance confirmed for the coverage calculation
- Second-appraisal expectations confirmed with the loan officer
Frequently Asked Questions
Who orders the appraisal?
The lender or its appraisal management company orders it. You and your agent supply the building documents and sales history to the appraiser through the loan officer.
Does the appraiser decide whether the condo is non-warrantable?
No. The appraiser reports project data on the form. The lender decides eligibility.
Can a strong borrower offset a weak building?
Not on project-level problems. Strong credit and deposits can improve the leverage cell you land in, but the lender can still decline a building it considers too risky.
What if the HOA won’t complete the questionnaire?
The file stalls, because lenders need it to assess the project. Ask the HOA manager early, and tell your loan officer right away if you meet resistance.
Does non-warrantable status lower the appraised value?
Not necessarily. Evidence is mixed and depends on the building and available comps. Thin sales history can make the comp search harder, which is why same-building sales matter.
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Form 1073 (blank form)
2. New England Condominium magazine
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a Bank Statement Jumbo Loan Works in Houston · How a Bank Statement Jumbo Loan Works in Naples · How a Bank Statement Jumbo Loan Works in Newport Beach
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.