# Bank Statement Loan for Non Warrantable Condo Units

- Author: TrueBankFlow (https://truebankflow.com)
- Published: 2026-10-17
- Category: Bank statement loan programs
- Canonical: https://truebankflow.com/blog/bank-statement-loan-for-non-warrantable-condo

> When a bank statement loan for a non warrantable condo works, which project issues lenders accept, and how the down payment and pricing change.
A bank statement loan for a non warrantable condo works when the project fails agency rules for reasons a non-QM lender can accept, such as one owner holding too many units, heavy commercial space or minor litigation. The borrower qualifies on deposits, but expects a larger down payment, a rate adjustment for the project and a slower condo review.

## What makes a condo non warrantable for a bank statement loan?

A condo is non warrantable when its project does not meet Fannie Mae or Freddie Mac eligibility rules, so a conventional lender cannot warrant the loan as eligible for sale. The problem lies with the building or the association, not the borrower. A bank statement loan is affected because the same project review still happens, under different rules.

### What the agency guide lists

[Fannie Mae's Selling Guide section on ineligible projects](https://selling-guide.fanniemae.com/sel/b4-2.1-03/ineligible-projects) lists the traits that make a project ineligible. Examples include one entity owning more than 20 percent of the units in a project of 21 or more units, commercial or mixed-use space above 35 percent of the project or building, hotel-style operation by a hotel or resort management company, pending litigation over safety or structural soundness, and unfunded critical repairs costing more than $10,000 per unit that are needed within twelve months.

A bank statement lender does not sell to Fannie Mae, so it can lend in some of these projects. It still reads the same facts, because its investor wants to know what it is buying.

## Non warrantable condo project issues bank statement lenders accept

Non-QM lenders commonly accept projects that fail agency review on single-entity ownership, commercial space or minor litigation. They are much less willing to lend where the building itself is at risk: structural defects, unfunded critical repairs or an association facing insolvency. The line is drawn around the safety of the collateral.

### Issues and how they are usually treated

The table below shows how common project issues tend to be treated. The non-QM column is a general example, and each lender sets its own limits.

| Project issue | Agency treatment | Typical non-QM treatment | What the broker collects |
| --- | --- | --- | --- |
| Single entity owns a large share of units | Ineligible above the limit | Often accepted with a higher cap | Ownership breakdown from the association |
| Commercial space above 35% | Ineligible | Often accepted, sometimes with a cap | Square footage split from the questionnaire |
| Minor litigation, such as a slip and fall | May be eligible | Usually accepted | Attorney letter describing the claim |
| Litigation over structural soundness | Ineligible | Often declined or reviewed case by case | Complaint, attorney letter, engineer's report |
| Unfunded critical repairs | Ineligible | Usually declined until funded | Reserve study, special assessment details |
| Condotel or hotel operation | Ineligible | Some lenders have a separate program | Rental pool agreement, management contract |

### Projects still being built

A unit in a project still under construction, or one where the developer still controls the association, raises extra questions about completion and sales. Financing the build itself is a separate product, covered in [how a bank statement construction loan works](/blog/bank-statement-construction-loan).

## How do down payment and pricing change on a non warrantable condo bank statement loan?

A non warrantable condo usually lowers the maximum LTV by five to ten points against a warrantable unit and adds a rate adjustment for the property type. The borrower's own credit and income are priced the same way as on any bank statement loan. The project adds a second layer of cost on top.

### The two layers in an example

Take an example borrower who would get 85 percent LTV on a warrantable condo. In a non-warrantable project the same lender might cap the loan at 75 or 80 percent and add an adjustment of a quarter to half a point. Those figures are examples to show the direction, not a lender's terms. Quote from the non-warrantable column of the matrix from the start, so the borrower is not surprised when the project review comes back.

### Special assessments and dues

Projects with repair problems often charge owners a special assessment, an extra fee on top of regular dues. Lenders count both in the housing payment, which raises the debt to income ratio. If an assessment is likely but not yet set, it is worth checking whether the borrower's cash flow can absorb it. [Cash flow projection analysis](/blog/cash-flow-projection-analysis) shows how to carry the figure forward from current statements.

## Condo questionnaire delays on a non warrantable bank statement file

Non warrantable condo files take longer because the lender must review the project as well as the borrower. The association has to complete a condo questionnaire, provide its budget, insurance and sometimes minutes or a reserve study, and some associations are slow to respond. Order the documents on the first day.

### Keeping the file moving

1. Ask the listing agent or association for the questionnaire as soon as the contract is signed.
2. Read the answers yourself before sending them to the lender, and flag any issue in the table above.
3. Request the master insurance policy and budget together with the questionnaire.
4. If there is litigation, request the attorney letter at the same time.
5. Tell the borrower that the project review, not their income, sets the closing date.

The usual timeline for a bank statement loan, and where project reviews fit in it, is set out in [how long a bank statement loan takes to close](/blog/how-long-does-a-bank-statement-loan-take-to-close). For the wider program basics, see [the broker's guide to bank statement loans](/blog/bank-statement-loans-broker-guide).

The borrower side of the file can be ready while the project review is still open. [TrueBankFlow](/) turns the statements into monthly deposit totals, a qualifying average and flagged transactions in an underwriting report, so the income work is finished before the association replies.