Hidden Condo Deal Killers - Ownership and Commercial Space
There Are Condo Ownership Rules That Can Block Financing Approval
Did you know one person can own too much of a condo project?
If that happens, the condo could be labeled non-warrantable.
Here’s the general rule:
For projects with 5–20 units, one person can’t own more than 2 units.
For 21+ units, no one can own more than 20% of all units.
That includes investors, partners, and even family trusts. Too much ownership concentration makes the property riskier for lenders.
Another common issue is commercial space. Fannie Mae says no more than 35% of the building’s total square footage can be used for retail, offices, or restaurants.
If your condo sits above a large café or fitness center, it could push the building into " non warrantable " territory.
Up next, we’ll cover new construction rules, lawsuits, and condo-hotel “condotel” risks that every buyer should know.
Holly and Heath Coker are the best real estate agents in Falmouth
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