Why does it have to be a "WARRANTABLE CONDO?" looking to buy a condo?

Real Estate Broker/Owner with TradeWinds Realty Group LLC 9054213B

Good Afternoon,


Thank you for your great question this afternoon regarding purchasing a condo.


You Asked:


Why does the condo I want to buy have to be warrantable?  What does that mean?  How does that affect me and my purchase?


Lenders are looking to finance "warrantable condos".  If your condo is "non-warrantable" we may have much more difficulty in obtaining financing.

What are mortgage lenders looking for in a warrantable condo?  Some of the items to be addressed are below that does not mean that there are not other considerations a specific lender may have on their list:


A Warrantable Condo        Lenders are looking for the least risk possible when they lend on a condo.

How do they determine their level of risk on the condo property, not just the Buyer?

You may be able to obtain financing or obtain financing at a lower interest rate if the lender believes their level of risk is less if:

1. The condo project is fully complete and all the common areas are insured.  The condo you are looking at may appear complete but if you find that in the condo documents there are still more phases or incomplete or non-existent common area amenties as originally planned then this could be an issue.

We are finding more and more that all phases have not been completed as planned due to the turnback in the economy or maybe additional pools or tennis courts are not complete as plan.  Sometimes a lender may be able to get a commitment on a property by phase - so please do not loose hope on the condo of your dreams but review of your condo documents is of the utmost importance.


2.  Lenders do like to know that the Homeowner's Association is under the control of the unit owners not the developer.  Typically control stays under the Developer until a certain number of units have been sold.  Sometimes from the Buyers outlook it is still good to have the developer control the association incase there are major dollar items still to be addressed in unplanned issues which may arise in the build out of the complex, other times it is much better to be Homeowner controlled so that the developer cannot change master deeds, unit deeds and complex plans without the full acknowledgement and agreement of the owners of the complex.


These are but two of the items which may appear on a lenders list to determine whether a complex is warrantable or not.

It is of the utmost importance to deal with an educated, experienced and enthusiastic Realtor in your condo or home owner purchase, there are just so many "moving parts".  I can also recommend to you very helpful and educated to the condo market loan officers to assist you in your purchase.  You have the power to create the best team in your real estate transaction, start by finding the knowledge based Realtor to assist you. 


Should you be interested in my services whether buying or selling a condo in Massachusetts or a single, multi or investment property or land development, please give me a call.  My cellular is 781-910-7294 and my email direct is MaryBeth@TradeWindsRealtyGroup.com.  Visit our website and also add it to your mobile phone.  Simply put our website http://www.TradeWindsRealtyGroup.com in the browser bar of your cellphone and click and here you have Massachusetts Real Estate Information right at your fingertips!  We look forward to assisting you, for myself and my TradeWinds Realty Group llc Team, we thank you.  Regards MaryBeth Mills Muldowney, Broker Owner, TradeWinds Realty Group llc






the Homeowners Association has been controlled by unit owners (as opposed to the developer) for some period, most units are owner-occupied, and no one person owns more than 10% of the units. Loans on units in warrantable condos receive better terms than loans on units in non-warrantable condos.





Posted by

MaryBeth Mills Muldowney, Massachusetts Real Estate Broker and Licensed Auctioneer

"The pessimist complains about the wind. The optimist expects it to change.

The Leader adjusts the sails." -John Maxwell

Founder and President, TradeWinds Realty Group LLC



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781-681-9959 Norwell office   508-746-5559 Plymouth office   781-910-7294 cellular


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David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

Its kind of akin to getting a learners permit and having your full license to drive. Both allow you to operate the car but one is with experience and an additional test/set of rules that says you are OK to operate on your own.

Aug 10, 2014 06:02 AM #1
MaryBeth Mills Muldowney
TradeWinds Realty Group LLC - Braintree, MA
Massachusetts Broker Owner

How true, I am unsure how easy it is to get your license in Oklahoma but I am amazed in Massachusetts I dont think many restaurants would allow you to "flip hamburgers" with so little experience as needed to obtain a license here.  Experience, Education and Perserverance!  three necessary qualities in a Buyers or Sellers Agent in any transaction. Have a great day David, beautiful day today in Massachusetts (what am I doing on a computer lol)


Aug 10, 2014 06:29 AM #2
Scott Larson
BHHS/Utah Properties - Park City, UT
Park City, Utah Real Estate News

Hi MaryBeth.  Non warrantable  condos can be a problem.  I recently had someone who very badly wanted to buy the condo she had been living in for over five years and unfortunately the condo was non warrantable.  After much searching I was able to find a lender to finance the transaction.  It was a lender that held their own paper which did make it easier but still, was no easy task.

Aug 10, 2014 06:58 AM #3
MaryBeth Mills Muldowney
TradeWinds Realty Group LLC - Braintree, MA
Massachusetts Broker Owner

That is a great point, don't take no for an answer (unless you get it 10 times LOL).

Yes risk and reward, I have found that some condos are really attractively priced due to being unwarrantable and the smaller pool of traditional lenders for the property and if you can find a lender even though the rate may be a bit higher than norm - the Buyers are still ahead of the game.  As the market improves, more and more units will be owner occupied and meet other criteria neccessary to make it "warrantable" and also refinanceable if needed!  great point Scott!



Aug 10, 2014 07:33 AM #4
David Saks
(retired) - Memphis, TN

Great information for all. Have a fine day and a terrific week ahead.

Aug 10, 2014 11:24 PM #5
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MaryBeth Mills Muldowney

Massachusetts Broker Owner
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