For many condominium boards and property managers, the question of Fannie Mae warrantability has never been more critical. With recent updates to FNMA guidelines for condominiums, the ability of condo unit owners to secure financing or refinance their homes depends directly on how well the association maintains its financial health, governance, and structural integrity.
Fannie Mae’s warrantability standards are no longer just about rental percentages and reserve funding—they now require proactive maintenance, financial responsibility, and compliance with critical repair guidelines. If your condominium is nonwarrantable, it means lenders may refuse mortgages on units, restricting sales and lowering property values.
Why Does Warrantability Matter?
When a condominium is FNMA warrantable, it means unit owners have access to conventional mortgage financing with competitive rates. However, when a condo becomes nonwarrantable, unit owners are limited to cash buyers or expensive portfolio loans, significantly reducing the buyer pool and lowering unit values.
Many boards don’t realize they are nonwarrantable until it’s too late—when a sale or refinance is suddenly denied. The best way to prevent this is to proactively monitor compliance and address issues before they impact financing eligibility.
Recent Changes to FNMA Guidelines
Over the past few years, Fannie Mae has significantly tightened compliance requirements for condominium associations. Here are some key areas that boards and property managers need to focus on:
Financial Health
Budgets must be balanced, and at least 10% of annual revenue must be allocated to reserves, unless a reserve study supports an alternative amount. No excessive delinquencies or reliance on loans or special assessments for operating expenses.
Critical Repairs & Deferred Maintenance
Structural, electrical, or mechanical issues must be promptly addressed. Condos with ongoing maintenance issues may be flagged as nonwarrantable, even if repairs are planned.
Insurance Compliance
Coverage must meet FNMA minimums, particularly in high-risk zones where traditional policies may be difficult to obtain. Boards must ensure adequate replacement cost coverage.
Legal & Governance Standards
The association must be in good standing with state and local agencies, with no pending legal disputes that could threaten financial stability.
Rental & Investor Ratios
No single investor may own more than 20% of total units, and rental unit percentages must not exceed 50% of the project.
How to Maintain Warrantability
Condominium boards and property managers must take a proactive approach to FNMA compliance. That means:
- Reviewing annual budgets to ensure compliance with reserve funding requirements
- Completing critical repairs on time and maintaining proper documentation
- Tracking investor and rental ownership to avoid exceeding FNMA limits
- Maintaining clear and transparent governance, including regular audits and legal compliance
- Completing RISE’s Annual FNMA Condominium Compliance Checklist
Download the FNMA Condominium Compliance Checklist
To help condo boards stay ahead of FNMA compliance requirements, RISE Association Management has developed an annual compliance checklist. This step-by-step guide will help you ensure your association remains warrantable and eligible for conventional financing.
📥 Download the 2025 FNMA Condominium Compliance Checklist
Final Thoughts
Keeping your condo warrantable isn’t just about following FNMA rules—it’s about ensuring long-term financial and structural stability for the community. Associations that take a proactive approach will safeguard property values, protect their residents, and maintain access to the financing options that keep their communities thriving.
